Bulgaria on the Brink of Joining the Eurozone – Is the Euro Coming Sooner Than Expected?

Business » FINANCE | January 17, 2025, Friday // 14:28
Bulgaria: Bulgaria on the Brink of Joining the Eurozone – Is the Euro Coming Sooner Than Expected?

Bulgaria is on the verge of meeting the inflation criterion, the final hurdle to joining the eurozone. Recent data from Eurostat shows that Bulgaria's average annual inflation was 2.61% in December. This leaves the country just 0.14% away from the required threshold, which stipulates that the inflation rate should not exceed 1.5% above the three EU countries with the lowest inflation rates.

The government is expected to submit a request for an extraordinary convergence report to the European Commission and the European Central Bank within the next two weeks. While Bulgaria's inflation is technically slightly above the target, the European Commission traditionally excludes countries with exceptionally low inflation from its calculations, such as Lithuania, which reported a mere 0.9% inflation. This development brings Bulgaria closer to fulfilling the last condition for eurozone membership.

Bulgaria’s inflation rate has been consistently decreasing. In December 2024, inflation stood at 2.1%, and from July to November, it remained between 2% and 2.8%, demonstrating a steady downward trend. These figures position Bulgaria among the EU countries with the lowest inflation, creating favorable conditions for euro adoption. Finance Minister Temenuzhka Petkova emphasized that Bulgaria is determined to seize this opportunity and enter the eurozone, targeting January 1, 2026, for the introduction of the euro.

In contrast, neighboring countries are experiencing significantly higher inflation. Romania and Croatia rank among the top EU countries with the highest inflation growth, with Romania's inflation hitting 5.5% and Croatia's 4.5%. Additionally, Greece, a popular destination for Bulgarian travelers, reported an inflation rate of 2.9% in December, surpassing Bulgaria’s level. Meanwhile, the overall inflation in the EU for December 2024 was 2.7%, slightly up from 2.5% in November, but still lower than the previous year’s 3.4%.

Source: Eurostat

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Tags: Bulgaria, inflation, Eurozone

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