After a prolonged period of economic stagnation, Europe is finally starting to show signs of growth. While the American economy has been developing at admirable rates, Europe has struggled to maintain stability. According to data from the European Commission, the GDP of the EU has increased by about 3% since 2019, which is significantly less compared to the 9% growth in America.

However, the economic outlook for Europe is improving. In the first quarter of 2024, the Eurozone reported a growth of 0.3%, which, although modest, is the first significant growth in the last six quarters and enough to exit the recession. Inflation has also been controlled, with the annual rate of price increases in the Eurozone remaining stable at 2.4%, just above the European Central Bank's (ECB) target.

Southern Europe, which traditionally lagged behind, is now expanding faster than the northern countries, thanks to the EU recovery fund created at the height of the COVID-19 pandemic. At the same time, Northern Europe was more severely affected by the high gas prices following Russia's invasion of Ukraine.

Monetary policy can also support Europe's recovery. Several central banks on the continent have already reduced interest rates, including Hungary, the Czech Republic, and Sweden. Markets expect the ECB to lower its main interest rate three times this year.

However, true economic recovery requires higher productivity and real investments. The recovery so far has been largely due to domestic demand and lower energy prices. But if productivity, measured by GDP per worker, does not start to increase, Europe risks falling further behind America.

The European economy is finally starting to grow, but now comes the hard part – maintaining this growth and ensuring sustainable economic development. Investors need to pay attention to the new opportunities that arise and support efforts to improve productivity and the investment environment in Europe.

The described economic development in Europe directly impacts the Bulgarian economy, including the Ruse region. The improvement in European economic prospects and the stabilization of inflation create favourable conditions for investors and businesses in Bulgaria. The recovery of the Eurozone and the lowered interest rates provide opportunities to attract new investments and improve the economic environment in Ruse.

The Ruse region, with its strategic location and developed infrastructure, has the potential to take advantage of these favourable conditions by attracting new businesses and supporting existing ones. Improving productivity and real investments in the region will contribute to its sustainable development and raising the standard of living for the local population.

European economic growth is good news for Bulgaria and Ruse, but successfully leveraging these opportunities requires active participation and strategic planning by local authorities and businesses.

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This analysis is based on an article in the digital edition of Capital newspaper, originally published in The Economist.