Bulgaria’s annual inflation rate fell below 3% for the first time since 2021, boosting the chances of switching to the euro, according to Euractiv.
Bulgaria‘s inflation rate reached the euro zone average of 2.4 per cent in April, the country’s finance ministry reported.
According to preliminary assessments, there is a possibility that Bulgaria will fulfil the price stability criterion before the end of 2024. In this regard, the country intends to submit additional reports upon fulfilling the price criterion.
The latest inflation data from the National Statistical Institute (NSI) for April confirms a clear trend of slowing inflation in the country. The next report on Bulgaria’s readiness to switch to the euro is expected in June 2024. If the country does not fulfil the inflation criterion in the report, Bulgaria can request another one within three months.
Achieving the criterion could give Bulgaria the green light to join the euro area, as Bulgarian inflation is traditionally insignificant or negative in the summer. Bulgaria also fulfils other key criteria for euro zone membership. It has a very low public debt of 23.1 per cent of GDP and a budget deficit well below 3 per cent.
EU officials also expressed confidence that Bulgaria could join the euro zone in 2025. EU Economic Affairs Commissioner Paolo Gentiloni stated during a visit to Sofia that there was no difference in attitude towards the euro zone accession process for Bulgaria and Croatia.
He noted that “the whole euro zone family is very happy about the possibility that sometime next year the 21st member, namely Bulgaria, will join.”
The European Commission forecasts that Bulgaria’s GDP will grow by 1.9 per cent in 2024 and 2.9 per cent in 2025. The deficit will be 2.8 per cent and 2.9 per cent this year and next respectively. Financial expert Rumen Galabinov stated that macroeconomic indicators showed that Bulgaria would fulfil all the criteria for euro zone membership by mid-2024.
Inflation is the only question, and if we don’t react, it will be by a negligible margin.
