Bulgaria's new trade geometry: Those who only look at Brussels overlook Sofia's biggest economic risk – and its best opportunity

Bulgaria's foreign trade: Strategic partnerships with Turkey, China and more

From peripheral state to central trading player: Bulgaria's economic transformation

Bulgaria's economic landscape is at a crucial turning point. While the country has traditionally been viewed as a peripheral member of the European Union, its geostrategic location between Europe, the Western Balkans, Turkey, and the Caspian region opens up new opportunities for trade relations. Strengthened economic ties with countries such as China, Serbia, Azerbaijan, and Turkey are not merely diplomatic projects but represent the building blocks of a potential new trade geometry. These changes, however, necessitate a fundamental strategic realignment to translate Bulgaria's geographic position into a sustainable business model. The challenge lies in functioning not only as a transit country but also as a hub for logistics, industrial processing, and technological services. Against the backdrop of a growing trade imbalance, rising imports, and declining exports, Bulgaria must find new ways to secure its long-term economic stability and competitiveness. The next phase of its economic development will depend significantly on the extent to which Bulgaria can shape these new trade relationships to create added value domestically while simultaneously strengthening its European integration.

From peripheral state to economic hinge

Bulgaria's foreign trade is often viewed almost exclusively through the lens of its membership in the European Union. This is understandable, but analytically incomplete. The EU single market remains the country's economic foundation, but a growing part of the strategic debate revolves around its connections to Turkey, the Western Balkans, the Black Sea region, the South Caucasus, and China. Bulgaria is not only located on the southeastern edge of the European Union; it also sits at the crossroads of the European single market, Turkish industry, the markets of the Western Balkans, the energy routes of the Caspian region, and Asian production networks.

This location is an economic advantage, but not yet a business model. Geography initially only creates opportunities. Only efficient transport routes, predictable border controls, reliable energy connections, competitive industrial sites, and a consistent investment policy transform a location map into real added value. Bulgaria therefore faces a strategic decision: It can remain primarily a transit country through which goods, energy, and capital flow. Or it can use its position to permanently establish logistics, industrial processing, technical services, research, and regional business headquarters within the country.

Against this backdrop, the strengthened economic ties with China, Serbia, Azerbaijan, and Turkey should not be understood as separate diplomatic projects. Together, they form four building blocks of a potential new trade geometry. China represents global production capacity, technology, and a vast sales market. Serbia connects Bulgaria with the Western Balkans and Central European transport corridors. Azerbaijan is an energy partner and a hub of the Trans-Caspian Central Corridor. Turkey is a direct neighbor, a major industrial center, a logistics hub, and already one of Bulgaria's most important non-European trading partners.

The crucial question, therefore, is not whether Bulgaria should expand its relations with these countries. Economically, there are many arguments in favor of doing so. Rather, the decisive factors are the conditions under which this occurs, what added value remains within the country, and whether the new ties complement European integration or create new dependencies. A successful strategy must combine openness with risk management, investment promotion with security interests, and rapid trade gains with long-term productivity growth.

Foreign trade with increasing imbalance

The starting point is challenging. In 2025, Bulgaria exported goods worth approximately 83.9 billion leva, equivalent to about 42.9 billion euros. Compared to the previous year, exports declined by around 3.2 percent. At the same time, imports rose by approximately 6.1 percent to 105.6 billion leva, or nearly 54 billion euros. This resulted in a trade deficit of approximately 21.7 billion leva, or just over 11 billion euros. The negative balance represented more than eight percent of economic output and was thus significantly higher than in the previous year.

Several factors underlie this development. Demand from key European markets remained weak, while Bulgarian domestic demand, higher incomes, public spending, and additional procurement supported imports. At the same time, Bulgaria's export structure is partly characterized by cyclical industrial goods, raw materials, semi-finished products, and price-sensitive goods. If European industry weakens or energy and commodity prices fall, this quickly impacts nominal export values. Conversely, the country imports numerous machinery, vehicles, electronic products, chemical products, and higher-value-added consumer goods.

Trade with the European Union also showed an unfavorable trend in 2025. Exports of goods to other EU countries fell by 3.8 percent to just under 53.9 billion leva, while imports from the EU increased by 4.5 percent to around 60.5 billion leva. Germany, Romania, Italy, Greece, and France remained the most important EU export markets. The strong focus on a few European partners is efficient as long as their industries are growing. However, in a period of weak economic activity in Germany and Central Europe, it becomes a risk.

Opening up to non-European partners is therefore fundamentally sensible. Diversification can cushion fluctuations in demand, open up new procurement channels, and give Bulgarian companies access to larger markets. However, it does not automatically solve the structural problem. If additional trade relationships primarily generate more imports, while Bulgarian exports remain limited to raw materials, agricultural products, and basic intermediate goods, trade volume will increase, but not necessarily economic strength. The composition of the trade flows is crucial.

The initial finding is therefore sobering: Bulgaria doesn't just need more trade, but better trade. Growth in trade volume is not an end in itself. It only becomes economically valuable when it increases productivity, business investment, technological capabilities, skilled employment, and export capacity. Relations with China, Serbia, Azerbaijan, and Turkey must be measured precisely against this standard.

Turkey as an industrial neighbor

Of Bulgaria's four trading partners, Turkey has the most direct economic significance. The two countries share a border, are closely connected by road and rail, and complement each other in several industrial value chains. Bilateral trade reached approximately €7.7 billion in 2024, an increase of more than 15 percent compared to 2023. In 2025, trade volume approached €9 billion, representing a further increase of more than 18 percent. This meant that Turkey's trade developed particularly dynamically, bucking the weaker overall trend in Bulgarian foreign trade.

For Bulgaria, Turkey is both a sales market and a dominant supplier. In 2024, Bulgaria exported goods worth nearly €2.9 billion to its neighbor, but imported goods worth around €4.8 billion. The bilateral deficit was therefore approximately €1.9 billion. Turkey accounted for about 6.7 percent of total Bulgarian goods exports, making it one of Bulgaria's most important export markets. This is a significant share, but it also demonstrates that import growth is considerably stronger.

The reasons lie in the industrial breadth of the Turkish economy. Turkish companies are competitive in metals, machinery, electrical equipment, textiles, chemical products, building materials, food, vehicle parts, and consumer goods. Geographical proximity reduces transport times and allows for flexible ordering. For Bulgarian companies, Turkey is therefore not only a competitor but also an important supplier of intermediate products and production equipment. Small and medium-sized enterprises, in particular, benefit from being able to access procurement sources outside the often more expensive Western European market.

Conversely, Bulgaria offers Turkish companies access to the EU single market, the Eurozone, and European supply and production networks. By the end of 2025, statistically recorded direct Turkish investments in Bulgaria amounted to more than €1.5 billion. Depending on the definition used, broader estimates are higher. Turkish companies are active in the construction, infrastructure, automotive supply, glass, aluminum, textile, food, and chemical industries. Investments in renewable energies are also being made, including new production capacities for solar modules and photovoltaic cells.

The greatest potential therefore lies not in the mere exchange of finished goods, but in cross-border production networks. Bulgarian sites can handle labor-, energy-, or space-intensive manufacturing steps, while Turkish partners contribute larger industrial networks, engineering capacities, and sales channels. Automotive components, electrical equipment, mechanical engineering, battery technology, the solar industry, food processing, logistics software, and industrial digitalization are particularly promising sectors. To prevent such collaborations from becoming mere extended workbenches with low margins, Bulgaria must attract development, testing, maintenance, certification, and regional management functions.

The bottleneck lies at the border. Kapitan Andreewo is one of the most important border crossings between Turkey and the European Union, but it is also a frequent bottleneck. Long waiting times for trucks, inconsistent inspection processes, and seasonal congestion increase costs. An additional border crossing, modernized inspection facilities, digital pre-registration, and harmonized procedures could significantly increase the economic benefits of the partnership. Every hour a truck spends stuck in traffic is an implicit trade tax.

China between sales opportunity and import pressure

Relations with China follow a different logic. China is neither a neighbor nor a natural part of the same regional supply chains. It is a global industrial giant whose economic size gives Bulgaria access to products, technologies, investors, and a vast consumer market. At the same time, China's enormous competitiveness creates a structural imbalance that is clearly evident in bilateral trade.

Trade between Bulgaria and China reached approximately four billion US dollars in 2024. It has grown significantly since 2020. In the first half of 2025, bilateral trade again reached around two billion dollars, almost a fifth higher than the previous year. China is thus one of Bulgaria's most important partners outside the European Union. However, the majority of trade consists of Chinese deliveries to Bulgaria. Bulgarian exports, primarily consisting of electronics, electrical equipment, machinery, solar technology, consumer goods, and industrial components, are dominated by copper, ores, chemical products, agricultural goods, and select specialty products.

This structure explains Bulgaria's large trade deficit with China. It is not solely a reflection of unfair relations, but also mirrors differing industrial capabilities and scales. Chinese manufacturers produce many complex goods at scales that Bulgarian companies cannot achieve. At the same time, Bulgarian suppliers' access to the Chinese market remains challenging. Certifications, approvals, distribution networks, brand awareness, language barriers, and regulatory requirements all increase the cost of market entry. Even high-quality Bulgarian products do not automatically sell in China.

High-level political talks, including exchanges between Chinese Vice President Han Zheng and Bulgarian government officials, therefore aim to expand trade, strengthen investment cooperation, and increase the presence of Bulgarian companies in China. Agriculture, food, information and communication technologies, automotive components, electromobility, high technology, energy, tourism, and logistics are regularly mentioned as areas of cooperation. This breadth demonstrates strong interest but carries the risk of producing non-committal wish lists. Without concrete projects, locations, permits, financing, and purchase agreements, political discussions remain economically ineffective.

The ratio of Chinese to foreign investment is also smaller than the high trade volume would suggest. Chinese direct investment in Bulgaria recently stood at only around €160 million. This puts China far behind European investors and also behind Turkey. Visible activity exists in telecommunications, photovoltaics, agriculture, real estate, and individual industrial projects, including components for the automotive industry. However, there is no sign of a broad surge in Chinese investment.

For Bulgaria, a clear selection strategy would be more sensible than a blanket invitation to Chinese capital. Investments that combine production, research, training, and local suppliers are desirable. Projects that exclusively assemble imported components, create few jobs, require high government guarantees, or control critical infrastructure are less attractive. In sensitive sectors such as telecommunications, data processing, energy systems, and dual-use technologies, European safety and testing standards must be consistently applied.

At the same time, it would be economically short-sighted to view China solely as a risk. Bulgarian companies can utilize Chinese machinery, batteries, solar components, and digital solutions to enhance their own competitiveness. The crucial factor is whether this leads to technological learning. Importing equipment improves production in the short term. However, it only yields long-term benefits when Bulgarian engineers master maintenance, adaptation, software integration, and further development. Therefore, the wisest China policy would be neither naive openness nor blanket rejection, but rather controlled cooperation with measurable local value creation.

Serbia as a link to Central Europe

Serbia is important to Bulgaria primarily as a neighbor, sales market, and transport partner. It is regularly among the leading buyers of Bulgarian goods outside the EU. Economic relations benefit from short distances, cultural proximity, and complementary production structures. At the same time, a key land route runs through Serbia, connecting Sofia via Niš and Belgrade to Hungary, Austria, and Germany.

Serbia's importance therefore extends beyond bilateral trade. For Bulgarian exporters, an efficient route via Kalotina and Niš is essential access to Central Europe. For Turkish and Asian goods, this same route forms part of the connection between Istanbul, Sofia, Belgrade, and Central European markets. Bulgaria and Serbia are thus not only trading partners but also joint operators of an economic corridor. If border controls, roads, railways, and customs systems are not compatible, the entire route loses its appeal.

Advances in the electronic transmission of customs data and integration into the so-called Green Corridors between the EU and the Western Balkans can accelerate the movement of goods. Data transmitted in advance allows for more targeted risk assessments, reduces duplicate checks, and improves planning for freight forwarders. The economic impact of such measures is often underestimated. A new industrial plant is visible and easy to communicate politically. However, a border clearance process that is several hours shorter impacts thousands of shipments daily and can generate greater benefits over the years.

For Bulgaria, Serbia also offers cooperation opportunities in automotive supply, metal processing, electrical engineering, agriculture, the food industry, energy, and information technology. Despite not yet being an EU member, Serbia has attracted substantial foreign industrial investment in recent years and is deeply integrated into European supply chains. Bulgarian companies can position themselves as suppliers, logistics partners, or joint providers for third-party markets.

However, competition also exists. Both countries tout their comparatively low costs, well-trained technical specialists, and proximity to EU customers. Serbia can offer investors more flexible subsidies in some cases, while Bulgaria scores points with EU membership, the euro, access to the single market, and a more stable regulatory framework. The most productive strategy would not be a subsidy war, but a functional division of labor. Shared supply chains, coordinated industrial clusters, and improved transport links can create more value than trying to poach individual factories from one another.

Serbia's European perspective plays a crucial role in this. The more Serbian rules, customs procedures, and technical standards are aligned with EU regulations, the easier cross-border investments will become. Bulgaria can act as a mediator and practical partner in this process. This will not only strengthen trade but also Sofia's political and economic position in the Western Balkans.

Bulgaria - Find and become a partner - Image: Xpert.Digital

Bulgaria is transforming from an underestimated EU market into a strategic nearshoring hub for European industrial SMEs. With low location costs, EU legal certainty, access to the Eurozone, and strong logistics networks on the Black Sea, the country offers robust alternatives to Asian supply chains.

At the same time, Bulgarian companies also benefit from this growing economic network, which serves as a strong springboard for their own expansion into Germany, Europe and global markets.

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Azerbaijan as an energy anchor and corridor state

Economic relations between Bulgaria and Azerbaijan are currently considerably smaller than those with Turkey or China. Nevertheless, their strategic importance is disproportionately high. This is primarily due to energy and transportation. Azerbaijan is a major gas supplier and, at the same time, a key link in the Trans-Caspian Corridor, which connects China and Central Asia to Europe via the Caspian Sea, the South Caucasus, Turkey, and the Black Sea.

Bilateral trade has so far been dominated by energy-related goods. In the first five months of 2024, total trade volume amounted to approximately US$129 million. Bulgarian exports reached just over US$21 million, although this represents an increase of almost 75 percent compared to the same period of the previous year. This growth indicates potential, but should not be overestimated due to the low starting point. Azerbaijani direct investment in Bulgaria was also low at the end of 2025, at approximately €12 million.

Cooperation should therefore be strategically expanded beyond the energy sector. Bulgarian companies possess exportable capabilities in mechanical and plant engineering, electrical engineering, electronics, food processing, agriculture, information technology, the pharmaceutical industry, and technical services. Azerbaijan, in turn, is investing in the modernization of its infrastructure, agriculture, logistics, and non-energy industries. Concrete partnerships can emerge from this if Bulgarian suppliers not only provide products but also include financing, maintenance, training, and local partners.

The energy sector remains the foundation. Gas from Azerbaijan contributes to the diversification of Bulgaria's supply and reduces dependence on single delivery routes. Through the connection between Greece and Bulgaria, as well as the regional gas network, this partnership can also gain a Southeast European dimension. Bulgaria has the opportunity to evolve from a mere end consumer to a distributor, storage, and trading hub for gas and, potentially later, for more climate-friendly energy sources.

The logistical importance of the Central Corridor could grow even further in the long term. Transport volume on the route increased to approximately 4.5 million tons in 2024, representing a rise of around 65 percent within a single year. Compared to 2021, it has multiplied several times over. While the corridor is still smaller and more complex to organize than traditional sea routes, it is gaining in importance given the geopolitical risks on northern routes. Bulgaria can participate in this growth via the ports of Varna and Burgas, connections to Georgian ports, and the land route through Turkey.

The economic opportunity lies not only in transit. Value creation occurs in port logistics, warehousing, customs clearance, repair, packaging, insurance, financing, data platforms, and further processing. If containers merely cross Bulgarian territory, the benefits remain limited. However, if regional distribution centers, spare parts depots, light manufacturing, and digital logistics services are established, the corridor can give rise to an industrial ecosystem.

Four partners with four functions

China, Serbia, Azerbaijan, and Turkey play different roles in Bulgaria's foreign trade. China is a global supplier, a potential investor, and a challenging sales market. Turkey is a direct industrial and trading partner with a strong influence on daily trade flows. Serbia is a regional market and a bridge to Central Europe. Azerbaijan supplies energy and provides access to the Caspian region and Central Asia.

It is precisely these differences that make a joint analysis worthwhile. New routes are emerging between China and Europe, potentially leading through Central Asia, Azerbaijan, Georgia, and Turkey. Bulgaria lies at the European gateway to this southern connection. Serbia is extending the corridor towards Central Europe. This makes bilateral relations part of a larger system. Investing in the Bulgarian-Turkish border will not only improve trade with Turkey but also connections to the Caucasus and Asia. A modernized rail line from Sofia to Serbia will benefit not only Serbian trade but the entire East-West transport network.

This leads to a key economic policy consequence: Bulgaria should not treat its international relations within isolated administrative jurisdictions. A corridor strategy is needed that integrates trade, transport, energy, industry, customs, digitalization, and investment policy. Individual talks and economic forums can establish contacts, but they do not replace a joint prioritization of infrastructure and value creation.

Such a strategy would need to include concrete performance indicators. These include border waiting times, rail speeds, handling costs, container transit times, the share of local supplies, newly created skilled jobs, research expenditures, and additional exports. Without measurable targets, foreign trade policy risks becoming a series of symbolic declarations of intent.

Logistics is the real industrial policy

Bulgaria's geostrategic location is often touted, but its physical infrastructure remains the true test. Varna and Burgas offer access to the Black Sea, Ruse connects the country to the Danube, Sofia lies at the intersection of major road and rail lines, and the Turkish border leads to the Bosporus and onward to Asia. On the map, Bulgaria appears to be a natural logistics hub. In practice, however, capacity, speed, reliability, and digital connectivity are what truly matter.

A major weakness is the railway. Many lines do not allow for competitive speeds, freight trains lose time at bottlenecks, and intermodal terminals are not sufficiently developed everywhere. Consequently, sea freight clearly dominates trade with China, while the direct rail share remains very small. This is not necessarily problematic for bulk goods. However, for time-critical industrial products, it prevents Bulgaria from making optimal use of its geographical location.

Ports must be more than just regional transshipment hubs. Greater drafts, modern container technology, efficient rail connections, transparent concessions, and digital port platforms are crucial. Varna and Burgas could receive goods from Georgia, Turkey, and the eastern Mediterranean and forward them towards the Danube, Serbia, Romania, and Central Europe. To achieve this, timetables, customs procedures, and data systems must be coordinated across borders.

The digitalization of logistics is just as important as concrete and railways. Electronic freight documents, advance customs information, shared risk management systems, real-time data on terminal capacities, and standardized interfaces reduce transaction costs. Bulgaria has a skilled IT workforce and could build its own value chain in this area. Instead of simply purchasing foreign platforms, Bulgarian companies can develop software for border control, fleet management, supply chain monitoring, and port management.

The economic leverage is considerable. Lower logistics costs improve not only transit but virtually every exporting industry. Machine manufacturers, food producers, chemical companies, and online retailers gain reach. Regions outside Sofia become more attractive to investors when they are reliably connected to ports, borders, and European markets. Logistics policy is therefore simultaneously regional, industrial, and export policy.

Where new value creation can occur

The most attractive areas for cooperation lie where Bulgaria can combine its existing capabilities with the demand and strengths of its partners. In the automotive sector, the country has a broad supplier base and experience in electronics, cable systems, sensors, metal parts, and software. Turkish and Chinese companies can contribute additional manufacturing, battery technology, and market access. Serbia complements the network with its own supplier clusters. The goal should be a regional value chain that encompasses not only component assembly but also development, testing procedures, and industrial software.

A second area of ​​focus is energy technology. Bulgaria needs new electricity grids, storage facilities, control systems, and renewable energy generation capacity. China and Turkey possess large production capacities for solar technology, batteries, and electrical equipment. Azerbaijan remains important for gas supplies and potential future energy corridors. Bulgaria can benefit from cost-effective technology but should pay attention to supplier diversity, cybersecurity, recycling, maintenance expertise, and an increasing share of local value creation.

Agriculture offers greater export potential than current volumes suggest. Bulgarian products such as grains, dairy products, wine, rose oil, honey, herbs, and processed foods can fill niche markets in China, Turkey, and Azerbaijan. The bottleneck is often not product quality, but rather scaling, certification, packaging, branding, and distribution. Individual small producers can hardly serve large foreign markets sustainably. Export cooperatives, shared logistics, government-supported certification processes, and professional branding strategies would be more effective than occasional trade fair appearances.

Information and communication technology, artificial intelligence, and industrial digitalization also hold promise. Bulgaria has a comparatively strong software industry, technical universities, and growing research infrastructure. Partnerships should not be limited to the sale of foreign hardware. More promising are joint development centers, applications for production and logistics, cybersecurity solutions, language models for smaller markets, and the digitalization of energy and transportation networks.

In mechanical engineering, Bulgaria can build on its industrial tradition. Azerbaijan needs equipment for agriculture and food processing, Turkey offers large supply chains, Serbia regional production networks, and China provides components and financing options. Competing on the lowest price would be futile for Bulgarian manufacturers. Opportunities lie in customized systems, short delivery times, European certification, retrofitting, and reliable service.

The dangerous misconception about trading volume

Political statements often cite rising trade volumes as evidence of successful relations. This indicator is easy to understand, but economically inadequate. Higher volumes can result from more expensive energy, increased consumer imports, or simply the transit of foreign goods. It says little about whether Bulgarian productivity, real wages, and technological capabilities are increasing.

Domestic value creation is crucial. A Chinese or Turkish factory is particularly valuable to Bulgaria if it establishes local suppliers, employs skilled workers, conducts research, reinvests profits, and achieves a high export share. A logistics center is more beneficial if, in addition to warehouse space, it also offers customs, financial, data, and repair services. An energy project strengthens the national economy if it ensures security of supply and establishes technical expertise within the country.

The same applies to Bulgarian exports. Selling unprocessed raw materials generates revenue, but usually with low margins. When these same raw materials are processed into components, food products, specialty chemicals, or branded goods, added value increases. Trade policy should therefore focus not only on export volumes but also on the share of knowledge-intensive and processed products.

The bilateral deficit also requires a differentiated assessment. A deficit is not automatically harmful if imports enable productive investments. Machinery, robots, or network technology can increase future export output. More problematic are persistently rising consumer imports without a corresponding expansion of domestic capacity. Bulgaria should therefore analyze its trade balance according to its intended use: productive capital goods, industrial intermediate goods, energy, and consumer goods have different economic impacts.

Europe's rules as an advantage rather than a hindrance

Opening up to the East and Southeast should not be misunderstood as an alternative to the European Union. Bulgaria's most important markets, sources of financing, and institutional safeguards are located in Europe. EU membership makes the country particularly attractive to Turkish, Chinese, and Azerbaijani investors. Access to the single market, common standards, and the euro are advantages, not burdens to be circumvented for the sake of quick projects.

At the same time, European rules set limits. State aid law, public procurement, environmental standards, data protection, cybersecurity, and the vetting of foreign investments apply regardless of a partner's origin. Particular caution is required for critical infrastructure and strategic technologies. The economic benefits of a project must be weighed against risks such as data access, dependence on suppliers, political influence, and a lack of transparency.

These rules can even help Bulgaria. Clear European standards protect the country from offering excessive guarantees or opaque special conditions in the competition for investments. They increase the quality of projects and build trust with other investors. A pragmatic foreign economic policy should therefore not choose between Brussels and Beijing, Ankara or Baku. It should leverage Bulgaria's European integration to enforce better conditions in its relations with third countries.

European coordination is particularly important with regard to China. Bulgaria alone possesses only limited negotiating power. Within the framework of the EU single market, it is part of one of the world's largest economic blocs. Common standards, instruments against unfair subsidies, and harmonized safety checks improve its negotiating position. At the same time, Bulgaria can set its own priorities within these rules and position itself as a location for selected, European-compatible investments.

The euro changes Bulgaria's offering

Since January 1, 2026, Bulgaria has been part of the Eurozone. For its foreign trade, this is more than a symbolic step towards integration. Exchange rate costs in trade with the Eurozone are completely eliminated, prices become easier to compare, and financing conditions become more predictable. For investors from China, Turkey, and Azerbaijan, Bulgaria's attractiveness as a production location for the European market increases.

The euro, however, does not eliminate real economic weaknesses. It doesn't repair railway lines, speed up permitting processes, or train engineers. If wages rise faster than productivity, price competitiveness can suffer. Since national devaluation is ruled out, innovation, energy efficiency, automation, and administrative efficiency become even more important.

The macroeconomic situation offers opportunities but demands discipline. The Bulgarian economy grew by 3.1 percent in real terms in 2025. A slowdown to around 2.5 percent is expected for 2026, while inflation is likely to remain elevated at approximately 4.2 percent. At the same time, the budget deficit and public debt are rising. Bulgaria still has a comparatively low debt-to-GDP ratio, but should not deplete this buffer on unproductive, ongoing expenditures.

Investments in border crossings, railways, power grids, education, and digital administration can strengthen foreign trade in the long term. Blanket subsidies without performance requirements, on the other hand, are risky. The best way to promote a business location is not through ever-increasing subsidies, but through reliable institutions, fast infrastructure, available personnel, and a predictable energy supply.

The underestimated risks

The new trade geometry is fraught with geopolitical risks. The central corridor passes through several countries, utilizes different modes of transport, and is dependent on regional stability. Conflicts in the Caucasus, tensions in the Black Sea, sanctions, insurance premiums, and political shifts can all alter costs and transit times. Therefore, a route is only resilient if alternative ports, border crossings, and modes of transport are available.

Despite its significant economic importance, Turkey remains a partner with currency, inflation, and economic risks. Strong fluctuations in the Turkish lira can shift competitive positions in the short term. Bulgarian manufacturers face price pressure, while imports may become cheaper. Companies therefore need currency management, flexible contracts, and a diversified customer base.

In its relationship with China, Bulgaria faces the threat of technological and trade policy dependencies. A one-sided supply structure could emerge, particularly for solar components, batteries, electronics, and telecommunications equipment. Low purchase prices are attractive, but a subsequent disruption or politically motivated supply stoppage could prove costly. Bulgaria should source critical components from multiple regions and avoid prematurely abandoning European production capacities.

The skills shortage is an internal risk. New industrial and logistics projects are competing for engineers, technicians, drivers, software developers, and skilled production workers. Without vocational training, the reintegration of emigrated skilled workers, automation, and controlled immigration, Bulgaria can attract investment but not fill all the positions. This leads to rising costs while productivity lags.

Added to this is the institutional risk. Slow approval processes, shifting political priorities, legal uncertainty, and local infrastructure deficits can delay even well-planned projects. International partners compare Bulgaria not only with its neighbors but also with locations throughout Central and Eastern Europe. A low tax rate alone is not enough if network connections, land acquisition, or regulatory decisions take years.

From conversation to a robust strategy

Bulgaria's relations with China, Serbia, Azerbaijan, and Turkey possess real economic potential. However, this potential is not being realized through more frequent meetings or larger delegations. What is needed is a national foreign economic strategy that sets clear priorities and functionally integrates the four partnerships.

Corridor capability should be the top priority. Connections from the Turkish border via Plovdiv and Sofia to Serbia, as well as from Varna and Burgas into the interior of the country, must become efficient, digital, and predictable. Border waiting times should be publicly measured, data exchanged across borders, and bottlenecks prioritized according to their economic impact. Ports, rail, road, and logistics centers must be planned as a single system.

Secondly, Bulgaria needs a selective investment policy. Subsidies should be tied to capital expenditure, job quality, research activity, export share, energy efficiency, and local suppliers. A project that creates high-quality production and development deserves different conditions than a mere import warehouse. For critical infrastructure, safety assessments and European regulations must be considered from the outset.

Thirdly, export promotion should be more strongly focused on the capabilities of small and medium-sized enterprises (SMEs). Companies need practical support with certification, financing, market analysis, sales, and finding partners. For China and Azerbaijan, industry-specific export platforms are more effective than general country-specific marketing. In Turkey and Serbia, regional clusters and shared supply chains can be prioritized.

Fourth, Bulgaria must strengthen its own technological position. Cooperation is most valuable when Bulgarian companies are not merely customers or subcontractors, but possess their own knowledge, intellectual property, and specialized products. Research centers, technical universities, vocational training, and industrial testing facilities are therefore an integral part of foreign economic policy.

Fifth, success should be assessed based on real economic results. More important than the number of signed letters of intent are new export orders, investment volume, local procurement quotas, additional rail and port traffic, reduced border crossing times, and increased productivity. Transparent indicators would show which partnerships actually deliver benefits and where political activity is merely being simulated.

Bulgaria's opportunity is greater than its market

With its small population and limited domestic purchasing power, Bulgaria is not a market that attracts international investors simply by virtue of its size. Its strength lies in the connection between different economic regions. As an EU and Eurozone member, it borders Turkey, is close to the western Balkans, has access to the Black Sea and the Danube, and can connect to the Central Corridor leading to the Caspian Sea and China. This combination is rare in Europe.

The economic outlook is therefore clear, but not comfortable. Bulgaria can become a Southeast European hub for industry, energy, logistics, and digital services. To achieve this, it must deepen trade with Turkey, accelerate the connection via Serbia, expand its energy and corridor partnership with Azerbaijan, and strategically direct Chinese cooperation toward high-quality, secure investments.

Current foreign trade figures also demonstrate why swift action is needed. Declining exports, rising imports, and a growing deficit are not proof of an impending crisis, but rather a warning sign of structural weaknesses. Bulgaria cannot assume that increased transit and import trade will automatically generate prosperity. The country must develop productive capabilities based on its current situation.

The provocative truth is this: Bulgaria is already a geographical hub, but not yet an economic one. Between a strategic map and a strategic economy lie functioning institutions, modern infrastructure, skilled people, and companies with their own products. If this development succeeds, relations with China, Serbia, Azerbaijan, and Turkey will become a lever for a broader, more resilient, and technologically advanced economy. If it fails, Bulgaria will remain primarily a transit point for others to transport their goods, energy resources, and interests.

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