Demographic decline as an economic shock: how Bulgaria is aging and this is already felt in pensions, healthcare and regions

For a long time, the demographic crisis sounded like an abstract warning about "someday in the future". Today, that "someday" is here. Bulgaria is one of the fastest aging and shrinking nations in Europe – and this is no longer just a social, but a very concrete economic problem.

The population of the country has shrunk to about 6.4 – 6.7 million people, and since 1970 Bulgaria has lost over 20% of its people. Fertility remains permanently below the replacement level – about 1.4–1.6 children on average per woman, far from the needed 2.1. At the same time, the proportion of people over 65 years of age is over 22% and continues to grow, and the average age of the population already exceeds 45 years.

The picture is complicated by emigration. External migration, especially of young and able-bodied people, is a key factor in the demographic collapse. Between 2022 and 2040, Bulgaria is expected to lose hundreds of thousands of people of working age, which directly limits the potential for economic growth. Many of those who have left create families abroad, which "exports" future births as well – a gain for the host countries, a loss for Bulgaria.

This combination – fewer births, more elderly people and emigration – directly hits the pension system. The proportion of people over working age reaches about a quarter of the population, while those under working age are only about 15%. For every 100 people who retire, significantly fewer new workers come, which turns the so-called demographic replacement into a serious problem.

The reforms in recent years are moving towards raising the retirement age and stricter access to pensions. Gradually, the age rises to 65 for men and women, and the required length of service increases. This relieves the budget in the short term, but does not solve the fundamental problem – a shrinking number of insured compared to a growing number of pensioners and a growing share of pension expenses in GDP.

The health system also feels the demographic pressure. Bulgaria is facing an aging population and aging medical staff, combined with the emigration of doctors and nurses. The country has one of the lowest ratios of nurses per 1,000 people in the EU, and in order to reach the average European levels, tens of thousands of additional specialists will be needed in the coming years. At the same time, people over 65 years of age have a much higher need for medical services.

The demographic decline is not evenly distributed. Northwestern Bulgaria and parts of Northern and Western Bulgaria are on the verge of demographic collapse. In some areas, the ratio of new workers to pensioners is dramatically low, and entire municipalities have shrunk by more than 20–30% in a decade. Internal migration further drains the smaller settlements, concentrating the younger population in Sofia and several large cities.

The economic consequences are clear: less labor force, more expenses for pensions, health and social services, and a growing risk of stagnation. If the trends continue, potential growth may slow to levels where catching up with the more developed countries will become almost impossible. The demographic decline is turning into a brake on the economy, which cannot be compensated only with projects and funds.

In other words, the demographic crisis is no longer a "background", but an active economic factor. It burdens the pension system, exhausts healthcare, leaves entire regions without people and undermines the prospects for growth. The solutions cannot be quick, but it is becoming increasingly clear that without a targeted policy to support families, retain and return young people, attract migration and a reasonable reform of pensions and healthcare, Bulgaria will face a demographic burden that the economy can hardly bear.