How the Introduction of the Euro is Progressing in Bulgaria: BNB Assessment and Perspectives

The process of adopting the euro in Bulgaria is proceeding according to preliminary expectations, said BNB Governor Dimitar Radev during a conference. Currently, nearly 85% of levs have been withdrawn from circulation, and over 7 billion euros have already been put into circulation.

Radev emphasizes that price stability is key and that assessments of inflationary trends should be based on comprehensive data and rigorous analysis. He cites data from the National Statistical Institute (NSI) and Eurostat, according to which the annual inflation in Bulgaria in January was around 2.3%, corresponding to the price trends in the Eurozone.

The transition to the euro is associated with a limited and temporary effect on prices of about 0.3-0.4 percentage points in monthly inflation in January, according to preliminary analysis by the ECB and BNB. This effect is mainly concentrated in specific categories of services and corresponds to the experience of other countries that have joined the Eurozone.

Radev distinguishes between short-term effects and long-term price transformation processes, noting the tendency for some domestic prices to rise, especially in the services sector. This reflects the equalization of productivity, wage dynamics, and changes in consumption patterns.

According to Radev, price developments should be in line with macroeconomic fundamentals and take place in an environment of stronger competition and effective public institutions. He emphasizes that sustainable price stability also depends on the quality of the institutional framework, the consistency of policies, and predictability over time.

Membership in the Eurozone requires a common monetary policy but does not remove responsibility at the national level in key areas such as fiscal prudence and supervision. Radev draws attention to the importance of trust and effectiveness in the fight against corruption.

He points out that European rules contribute to the predictability of processes, including in times of political instability. Radev concludes that membership in the Eurozone is not a loss of sovereignty but a transition to participation in a common institutional framework. In the long term, improvements in financing conditions and a regional dimension for Southeast Europe are expected. The results will depend on the consistency of policies and the sustainability of the institutional framework.