Bulgaria does not meet the inflation criterion for adopting the euro, the European Commission (EC) announced, BGNES reported.
This is according to the Convergence Report published today.
"In the context of its assessment of legal compatibility and the fulfilment of the convergence criteria, taking into account the relevant additional factors, the Commission considers that Bulgaria does not meet the conditions for adopting the euro," the document states.
1. Bulgaria does not fulfil the price stability criterion.
The average rate of inflation in Bulgaria in the 12 months to May 2024 is 5.1%, which is above the reference value of 4.1%. The commission forecasts that it will remain slightly above the reference value in the coming months, but the gap is expected to close by the end of 2024 or early 2025.
2. Our country fulfils the criteria for public finances.
Bulgaria is not subject to a Council decision on the existence of an excessive deficit. The consolidated government budget deficit decreased by 1.1 percentage points to 2.9% of GDP in 2022 and narrowed further to 1.9% of GDP in 2023.
3. Sofia meets the criterion for the exchange rate.
Bulgaria entered ERM II on 10 July 2020 and, at the time of the adoption of this report, has been participating in the mechanism for almost 4 years.
4. The criterion for convergence on long-term interest rates has also been met.
The average long-term interest rate in the 12 months to May 2024 was 4.0%, below the benchmark of 5.5%. From a low interest rate in early 2022, the long-term interest rate has been gradually increasing so far.
Stay tuned for more details. | BGNES
