Atanas Kolev, Chief Advisor at the Economic Directorate of the European Investment Bank, told Bulgarian National Radio that Bulgaria’s adoption of the euro is expected to positively influence the country’s credit rating. He explained that disciplined fiscal policy will accelerate rating improvements, which will reduce debt servicing costs and indirectly enhance the creditworthiness of municipalities, particularly those borrowing on international markets.

Kolev highlighted that the euro will strengthen Bulgaria’s investment climate. By removing currency exchange costs and minimizing currency risk with its 20 main eurozone trading partners, Bulgaria will enjoy greater transparency in pricing, making comparisons with other eurozone countries easier.

Addressing concerns about potential price hikes, Kolev noted that similar reactions have been observed in other countries adopting the euro. Producers and traders in Bulgaria may initially adjust pricing, influenced by the restrictive legal framework for price changes. However, he emphasized that historical experience shows that any minor price increases in the early months, often due to rounding, are temporary, and overall inflation tends to stabilize or even decrease within a year.

Export-oriented industries and the financial sector are expected to see immediate benefits from euro adoption, including lower borrowing costs, as interest rates adjust downward.

Kolev also assessed the broader European economic context, noting a smooth recovery from the energy shock of 2022–2023. He cited high employment levels, growing incomes, and improving lending conditions for the private sector, with investments expected to rise gradually. He acknowledged that budgetary constraints in some EU member states could slow the process but described Bulgaria’s domestic situation positively, citing strong growth in both private and public consumption and solid investment activity.

Looking ahead, Kolev expressed hope that reduced political uncertainty in Bulgaria next year will further support economic development and help the country fully capitalize on the benefits of adopting the euro.

Source: BNR interview