The economy of Bulgaria, which introduced the euro on Thursday, is growing more than three times faster than the euro zone average, with a similar inflation rate. At the same time, the average annual income in Bulgaria is three times lower than the average in the Eurozone.
The requirement to enter the euro zone is to meet the conditions known as the convergence criteria or the Maastricht criteria. This is to ensure that the introduction of the euro by a Member State does not disrupt its functioning.
These criteria concern stable prices and interest rates, public finances and currency exchange rates. In the case of prices, it is required that the average inflation rate for a year should not be higher than 1.5 percentage points. above the rate of the three most price-stable countries in the euro area. A country aspiring to adopt the euro must also have a planned or actual public finance deficit that does not exceed 3%. GDP and public debt ratio lower than 60%. GDP.
Additionally, average long-term nominal interest rates in the country may increase by at most 2 percentage points. exceed the rates of the three best performing Member States. There is also a requirement to participate in the EU exchange rate mechanism (ERM II), which is to demonstrate whether the country's economy can function efficiently without excessive fluctuations in exchange rates.
After joining ERM II, the exchange rate of the national currency is linked to the euro according to the central rate agreed with the euro area member states and those participating in the mechanism, the European Central Bank (ECB) and with the participation of the European Commission. The allowable exchange rate fluctuations under the mechanism are 15%. above or below the agreed central rate. There are also smaller, legal requirements. These include ensuring the independence of the central bank and compliance of national law with EU treaties, as well as, among others, the ECB Statute. An assessment of whether a given country meets all these requirements is carried out at least once every two years in the Convergence Report.
Economic growth in Bulgaria nwas driven by private consumption
According to the Bulgaria Convergence Report of June 2025, economic growth in this country accelerated from 1.9 percent. in 2023 to 2.8 percent in 2024 It was driven by private consumption, supported by growth in real wages, employment and greater social benefits. For comparison, according to ECB data, the real GDP of the euro area in 2024 increased by 0.9%. compared to 0.4 percent in 2023
In Bulgaria, consumer inflation (HICP) fell to 2.6%. in 2024, which was slightly higher than the average for the euro area (2.4%). From January to April 2025, inflation in Bulgaria was 2.7%, and the EC saw no “threats to the durability of price stability.”
The EC did not subject Bulgaria to the excessive deficit procedure, which – calculated using the EU methodology – increased from 2%. GDP in 2023 to 3%. in 2024, a public sector debt in 2024 amounted to 23.8 percent. GDP.
Bulgaria joined the ERM II mechanism in July 2020, and the national currency maintains the central rate with a standard fluctuation band. At the same time, the average long-term interest rate in the 12 months to April 2025 for Bulgaria was 3.9%. and was lower than the reference value (5.1%).
In November last year, the EC forecast that economic growth in Bulgaria would amount to 3%. in 2025 and 2.7 percent in 2026, and the average annual inflation will reach 3.5%. in 2025 and 2.9 percent in 2026. According to the EC, the unemployment rate will be 3.5%. in 2025 and 3.7 percent in 2026, and the public finance deficit – 3%. and 2.7 percent GDP. At the same time, the public sector debt is expected to reach 28.5%. GDP in 2025 and 30.6 percent in 2026
For comparison, in the euro zone, the EC forecast in May last year that the real GDP of the euro zone would grow by 0.9%. and by 1.4 percent in 2025 and 2026, respectively, and inflation will drop to 2.1%. and 1.7 percent The unemployment rate in 2026 would be 5.7%, and the deficit calculated using the EU methodology would reach 3.3%. in 2025 and 2026
According to Eurostat data from March 2025 on wages in 2024, the average hourly labor cost in 2024 was estimated at EUR 37.3 in euro area countries. Across the EU, this cost was the highest in Luxembourg (EUR 55.2) and the lowest in Bulgaria (EUR 10.6). The net income of a childless person amounted to approximately PLN 32.3 thousand on average in the euro zone. euro per year compared to 11 thousand euro in Bulgaria, which was the lowest result in the entire EU.
Bulgaria joined the EU in 2007 together with Romania. It adopted the euro on January 1, 2026 and thus became the 21st member country with a common European currency. The last country to adopt the euro before Bulgaria was Croatia – it entered the euro zone in 2023.
Concerns are mixed with optimism in the face of the adoption of the EU currency
Bulgarian BNT television noted on Friday – on the first working day after the introduction of the euro – that shopping was going smoothly because until the end of January, customers could pay in leva or euro, by card or vouchers. Payments in leva or cashless were preferred, and customers received change in euros, the station noted.
Controls have been intensified in the country to ensure that sellers do not inflate prices after the introduction of the new currency. So far, 69 entities have been punished, the Bulgarian Nova television reported that day.
The station also drew attention to the problem of paying for taxi rides. It turned out that not all cars are equipped with new devices that display the amount in euros. Another problem is that some of the adapted devices almost double the number of kilometers traveled, which translates into a higher fee.
Bulgaria's entry into the euro zone was celebrated on Thursday with the presentation of the new currency on the facade of the central bank in Sofia and a fireworks display. At the beginning of the new year, the euro became legal tender in the country, but the possibility of making parallel payments in leva and euro will be maintained until the end of January. The rest will be spent only in euros. From February 1, the euro will be the only official currency of Bulgaria.
Recent Eurobarometer surveys indicate that approximately 40 percent Bulgarians support the new currency, and almost 50 percent is against it. The skepticism is partly fueled by fears that sellers will round prices when converting currencies, as happened in other countries after joining the euro zone.
Non-governmental organizations noted that the opposition was strengthened by a campaign by pro-Russian political forces and coordinated messages on social media. The messages of these groups and the demonstrations supporting them focused on the claim that joining the euro zone would undermine Bulgaria's national sovereignty and identity and would only benefit the political elites.
A driving instructor from Sofia quoted by Reuters expressed his belief that “everything will be the same, maybe even better.” – Our money will be in a different currency – if I have 10,000 leva, now I will have 5,100 euros – he said.
– My expectations related to (the adoption of) the euro are positive, I don't think there is anything to worry about, quite the opposite. Only we will benefit from this, said the Bulgarian jeweler in an interview with the agency. – Anyone who goes on a trip will have no problems with currency exchange – she added.
Some, including business owners, complained that it was difficult for them to get euros, and shop owners claimed that they did not receive the euro starter packages they ordered, Euronews reported. – This is not the right moment – said the 64-year-old interviewer of the portal. – Yesterday I saw data for Italy, Spain and Germany: their debt is huge. And in the end we will carry it on our own shoulders.
The impact of adopting the euro on inflation in Bulgaria will be visible only after a few weeks. As with other countries adopting the euro, Bulgaria may experience a one-off rounding effect on amounts converted from left to euro.
Jakub Bawołek (PAP)
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