How Will Euro Adoption in January 2026 Change Real Incomes and Inflation Over the Next Year?

On January 1, 2026, Bulgaria will join the eurozone, switching from the lev to the euro at a fixed rate of 1 EUR = 1.95583 BGN. This decision comes on the back of a credit rating upgrade by agencies like Fitch (BBB+), signaling stability and new opportunities for households and businesses. But how will this shift impact real incomes and inflation in 2026?

The euro and purchasing power

The removal of exchange fees and currency risk will make travel and online shopping easier, saving consumers money. The European Commission predicts that lower loan interest rates and easier access to capital could increase real incomes by 2–3 % in 2026.

According to ING Think, in other countries that adopted the euro, there was a one-off increase in service prices (such as restaurants and salons) by about 0.5–1 %, but no lasting inflationary effect.

Inflation: risk or under control?

Inflation in Bulgaria is expected to slow to 1.8 % in 2026, down from 3.6 % in 2025. Key factors include:

• Price stabilization – elimination of currency fluctuations in imports/exports.
• Increased monitoring by the BNB and ECB – ensuring price lists are fair and speculative increases are addressed.

However, experts warn of a potential “psychological effect” on some goods, with vendors rounding prices up when converting to euros.

Possible scenarios for 2026

Scenario A: Greater purchasing power

Lower interest rates and stable inflation allow households more room for savings and consumption.

Scenario B: Moderate price increases for services

Service prices temporarily rise by 0.5–1 %, but the effect is short-lived.

Scenario C: Delayed impact on incomes

The growth in real incomes is slower than expected due to labor market adjustments and global economic challenges.

Conclusion

Adopting the euro is a major step for Bulgaria, with potential benefits for the economy. Coordination between the state, businesses, and regulators will be crucial to ensure the transition brings more gains than risks for households.

Disclaimer:
This article is an analytical review by the BurgasMedia editorial board and reflects the opinion of an expert group based on current political, economic, and social developments.
The conclusions presented are not predictions or factual statements, but a hypothetical interpretation of possible scenarios.
The publication is not responsible for any discrepancies with future developments and encourages readers to form independent judgments based on verified sources.