Send to Kindle
@Wikimedia Commons
The European Central Bank (ECB) has cut its key interest rates by 25 basis points, marking the first reduction since 2019. The main refinancing rate, marginal lending rate, and deposit rate have been adjusted to 4.25%, 4.50%, and 3.75% respectively. This is the first decrease in the refinancing and marginal lending rates since March 2016, and the deposit rate since September 2019.
From July 2022 to September 2023, the ECB raised interest rates by a total of 450 basis points to curb soaring inflation in the Eurozone, which peaked at 10.6% in October 2022. In May 2024, Eurostat reported inflation at 2.6%.
The ECB has revised its inflation forecasts upward. Headline inflation is now projected to average 2.5% in 2024, 2.2% in 2025, and 1.9% in 2026. Core inflation, excluding energy and food prices, is forecasted to average 2.8% this year, 2.2% next year, and 2% in 2026.
For economic growth in the Eurozone, the ECB expects an acceleration to 0.9% this year, 1.4% in 2025, and 1.6% in 2026. The Governing Council remains committed to returning inflation to the medium-term goal of 2% and will maintain interest rates at restrictive levels as long as necessary.
Decisions on interest rates will depend on assessments of inflation outlooks, economic and financial data, core inflation dynamics, and the strength of monetary policy transmission. The ECB does not commit to a specific trajectory for interest rates.
Additionally, the ECB announced a reduction in the Eurosystem's holdings of securities under the Emergency Securities Purchase Program (PEPP) by an average of 7.5 billion euros per month in the second half of the year.
GERB leader Boyko Borissov has firmly rejected accusations from the WCC-DB coalition, alleging that the government is obstructing Bulgaria’s efforts to join the Eurozone
Bulgaria will request a convergence report from the European Commission regarding its readiness to join the Eurozone once the country fulfills the price stability criterion
The Bulgarian government has effectively abandoned its plan to enter the eurozone on January 1, 2026
The adoption of amendments to the Law on the Bulgarian National Bank (BNB), crucial for Bulgaria's entry into the eurozone, was unexpectedly blocked in parliament as the ruling GERB party withheld its support
The President of the European Parliament, Roberta Metsola, highlighted Bulgaria's progress toward adopting the euro as its primary currency, describing it as "one step away"
At the Sofia Economic Forum V, experts expressed strong support for Bulgaria's potential membership in the eurozone, predicting significant positive impacts on investor confidence
An Afghan man suspected of carrying out a knife attack in Aschaffenburg, southern Germany, which claimed the lives of two individuals and injured two others, had been slated for deportation to Bulgaria
The European Union must heed U.S. President Donald Trump’s call for increased defense spending, according to Kaja Kallas, the EU’s top diplomat
U.S. President Donald Trump announced plans to impose tariffs on the European Union
The European Union will maintain a pragmatic stance toward the administration of Donald Trump while prioritizing the defense of its strategic interests
On his first day back in office, President Donald Trump once again urged the European Union to increase its purchase of American oil and gas, warning that failing to do so could result in tariffs
Bulgaria is falling behind in its utilization of European Union funds
Bulgaria's Perperikon: A European Counterpart to Peru's Machu Picchu
Bulgarians Among EU's Least Frequent Vacationers, Struggling with Affordability
