Bulgaria's Political Stability Key to 2026 Euro Adoption, Says ING Analysis

Bulgaria's political stability remains a crucial factor for its planned euro adoption in January 2026, according to the latest report by ING Think, the analytical unit of ING Bank. While the bank maintains its forecast for Bulgaria's eurozone entry, it acknowledges emerging uncertainties, particularly regarding inflation and political dynamics, CE Report quotes BTA

ING Think warns that short-term inflation spikes could shift the decision from a technical to a political one. The bank expects Bulgaria's consumer price index (CPI) inflation to reach 4.6% by the end of 2024 and 3.0% in 2025. Additionally, the liberalization of the electricity market is identified as a key factor to monitor.

Political developments add further uncertainty. The recent decision by Bulgaria’s Central Electoral Commission (CEC) to set a new 4% parliamentary entry threshold has reshaped the National Assembly, granting the Velichie (Grandeur) party 10 seats. Such shifts could influence policy direction and impact the euro adoption timeline.

Despite potential hurdles, ING Think believes Bulgaria’s economic growth will remain robust, forecasting a 2.6% GDP growth in 2025. Factors such as wage increases, expansionary fiscal policies, and regional projects like the Schengen ascension and NATO-led infrastructure upgrades are expected to boost economic activity. However, political uncertainty may weigh on investments.

Industrial activity remains in negative territory, reflecting the sluggish performance of key trading partners like Germany and Romania. Nonetheless, ING Think emphasizes that achieving political stability will be the decisive factor in ensuring Bulgaria’s successful euro adoption in 2026.