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The report aims to assist the Bulgarian authorities in identifying options for policies and reforms that would help to boost productivity and employment and thereby economic growth and income convergence. To achieve this, the report looks at Bulgaria’s product and labor markets, human resource development, and R&D and innovation system. The reform options are arranged along a time dimension, ranging from short to medium term. The implications of the proposed policy options for the government’s budget are also briefly explored, including the utilization of EU grant funds.

To increase productivity and move Bulgaria to a higher growth path, action would need to be taken on several fronts. Growth is a result of a number of factors, including an enabling institutional framework that provides appropriate incentives. This will include above all the provision of incentives for increased labor mobility, which the report shows is currently weak, but essential for strong growth in the longer run. Incentives for investing in R&D and human capital would also be central.

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