Economist Stoyan Panchev from the Expert Club for Economics and Politics told Bulgarian National Radio that while the immediate technical issues of converting the lev to the euro are manageable, the bigger concern lies in structural, long-term inflation. Drawing from Croatia’s experience, Panchev predicts that price increases are likely to continue in Bulgaria, especially as the absence of a national currency and the removal of the currency board will shape economic policy for years to come.

“The rounding issues with the euro will resolve within six months, but the significant structural changes from entering the eurozone will influence our economy in the years ahead,” Panchev said. He noted that operating with an extended budget in the coming months offers a double-edged effect: it allows temporary consolidation and deficit reduction, yet it risks masking the true fiscal situation, delaying transparent discussion of the real budget deficit.

The economist pointed to interest rates as a key driver behind property market inflation. He explained that rising liquidity in the banking system and potential requests from the European Central Bank to adjust rates could prolong high growth in loans and property prices. Conversely, a financial sector recession could trigger a sharp rise in interest rates and market corrections. Panchev suggested that gold may perform well in 2026 and introduced a public debt calculator, designed to track Bulgaria’s debt growth, anticipating that the financial landscape next year may be more challenging than in 2025.

Small Businesses Brace for Currency Transition

As Bulgaria prepares to adopt the euro, questions mount over everyday transactions, particularly for small businesses. During January, both leva and euro will remain valid, but change must be returned in euros even when payments are made in leva. This raises concerns for merchants and customers alike.

Kamen Avramov, owner of a grocery store in Montana, told Nova TV that small and medium businesses face many uncertainties. He said the state could have better prepared merchants through organized guidance from tax authorities and banks. One immediate challenge is the limited supply of euro coins and banknotes. Although starter packs are available, their value may quickly prove insufficient. Avramov calculated that a 250-euro starter pack could run out within hours during morning sales, leaving merchants scrambling to provide correct change.

Older customers, who form a significant portion of neighborhood store clientele, may approach the new currency cautiously. “Most shoppers here are pensioners, so until their pensions arrive after the 6th, many will likely pay in leva,” Avramov explained. He has even tried sourcing additional euro coins through acquaintances traveling abroad to ensure his store is prepared for the transition.