An Evaluation and Comparative Analysis of Fiscal and Macrofinancial Policies during the COVID-19 Pandemic: The Case of Bulgaria in the Balkan Context

This paper presents a comprehensive analysis of Bulgaria’s response to the COVID-19 pandemic, offering valuable insights for policymakers and researchers grappling with similar challenges globally. The study highlights the multifaceted approach undertaken by Bulgaria, incorporating fiscal, and macro-financial policies to navigate unprecedented challenges. The effectiveness of these measures is underscored by the nation’s relative economic resilience, with milder GDP contraction and stable unemployment rates compared to some EU member states. The post-pandemic era presents new challenges, including sector-specific issues, inflationary pressures, and the imperative of fiscal sustainability. Comparative regional analysis with neighbouring Balkan countries and EU member states provides additional context, revealing shared challenges and diverse recovery paths. Particularly, our econometric analysis using data from Balkan countries suggests that higher pre-pandemic inflation rates constrained fiscal expansion, richer countries were more capable of expansionary policies, higher Covid-19 infection rates prompted more expansionary measures, and stringent public health measures led to less expansionary policies in Balkan governments. Looking ahead, international collaboration, regional cooperation, and efforts to strengthen resilience are pivotal for Bulgaria’s economic future. Lessons drawn from this experience underscore the necessity of adaptability, transparent communication, and prioritizing sustainability and inclusivity in future policymaking, contributing to the broader global discourse on crisis management.