2016 Annual Review of Labour Relations and Social Dialogue Bulgaria PLAMEN DIMITROV February 2017  In 2016 the Bulgarian economy showed better than expected performance. The pace of real economic growth of 3.6 per cent in 2015 continued also in 2016. Significant contributors to the growth were consumption and exports, while gross fixed capital formation continued its stagnation.  Political instability, enhanced fiscal discipline, low domestic investment activity, and slow labour market recovery are among the leading factors that have worsened the environment for development of social dialogue and industrial relations in Bulgaria.  The minimum wage remains one of the most important tools to influence incomes policy, but increasingly it has been facing more and more intense opposition from employers' organisations. Furthermore, negotiations on minimum insurance thresholds and on a framework for minimum wage-setting have been controversial.  А trend towards decentralisation of collective bargaining has been observed, as well as abandoning the practice of extending branch collective agreements to all companies in a particular sector/branch. All these developments are gradually diminishing unions’ collective bargaining power and as a result the processes of social stratification and income inequalities have deepened.  For the trade unions, the issues related to improving the sectoral and branch social dialogue, the establishment of a common procedural framework for conducting collective bargaining at various levels and providing necessary information to their negotiating teams are of strategic importance.  The social effects of the new economic governance and the European Semester are apparent. Greater activity and involvement of trade unions at the national level in the elaboration and discussion of key documents is needed.