The software sector in Bulgaria recorded total revenue growth of 16.5% in 2023, exceeding the initial projection of 12% increase, according to the annual industry report Barometer, published by the Bulgarian Association of Software Companies (BASSCOM) in mid-December 2024. Despite a challenging macroeconomic environment, the sector created over 2,600 new jobs and contributed three times more in taxes and social security payments per employee compared to the national average.
According to BASSCOM's board chairman Krum Hadzhigeorgiev, 2024 has shaped up to be a unique, challenging and interesting year, characterized by global conflicts, economic instability and slowed growth. Domestically, factors such as political crises, seven parliamentary elections in less than four years, and uncertainty also played a role. "Years like this happen but everything is fine - economic cycles are nothing new. The good news is that the sector as a whole is growing faster than we expected," Hadzhigeorgiev commented during the presentation of the report.
He added that several factors contribute to the continued growth, with the primary driver being strong demand for the sector's services and products. Furthermore, software companies have now accumulated enough experience and maturity to navigate economic cycles effectively, emphasized Hadzhigeorgiev.
The software sector in numbers
According to the presented data, revenue in 2023 exceeded 8.7 billion levs and forecasts for 2024 show a further increase to an estimated 9.7 billion levs (+12.4%). More than 80% of the 2023 revenues came from exports, which amounted to 7.63 billion levs, up 16% year on year. For comparison, BASSCOM predicts a more conservative increase in exports in 2024 - by 11% to 8.5 billion levs.
For yet another year, the ratio of the software sector's revenue to Bulgaria's GDP continued to rise in 2023, reaching its highest level ever of 4.9%. The association forecasts that this ratio will be maintained in 2024.
"Today, we are nearing 10 billion levs in revenue and over the past eight years we have grown nearly fivefold. Not all companies are growing - some report no revenue increase, while others see only minor gains. However, most firms are expanding, with some achieving annual growth rates between 20% and 40%. So, the overall picture is positive," commented Georgi Yanchev, a BASSCOM board member.
The report also sheds light on employment in the sector, which now exceeds 60,000 people, representing 1.9% of the country's workforce. The industry anticipates the creation of a further 2,000 jobs in 2024. In this regard, Yanchev highlighted that the sector's impact on the economy extends beyond tax contributions, as it also fuels consumption. "The software industry has a significant impact on Bulgaria's economy, and this influence continues to grow," he noted.
BASSCOM also presented findings from an internal survey among its members on AI adoption within their companies. In 2024, 56% of the firms reported that AI was utilized only in certain job positions, while 38% indicated that AI was applied across all roles. The number of companies still in the planning phase of AI implementation dropped sharply - from 23% in 2023 to just 4.5% in 2024.
The association forecasts continued sector growth. By 2026, an additional 10,000 jobs are expected to be created, bringing the total employment number above 70,000. At the same time, sector revenue is projected to reach 14 billion levs, with exports exceeding 11 billion levs.
The software sector in Bulgaria recorded total revenue growth of 16.5% in 2023, exceeding the initial projection of 12% increase, according to the annual industry report Barometer, published by the Bulgarian Association of Software Companies (BASSCOM) in mid-December 2024. Despite a challenging macroeconomic environment, the sector created over 2,600 new jobs and contributed three times more in taxes and social security payments per employee compared to the national average.
According to BASSCOM's board chairman Krum Hadzhigeorgiev, 2024 has shaped up to be a unique, challenging and interesting year, characterized by global conflicts, economic instability and slowed growth. Domestically, factors such as political crises, seven parliamentary elections in less than four years, and uncertainty also played a role. "Years like this happen but everything is fine - economic cycles are nothing new. The good news is that the sector as a whole is growing faster than we expected," Hadzhigeorgiev commented during the presentation of the report.
