site.btaING Forecasts Bulgaria's Euro Area Entry in 2026, Highlights Political Stability as Key

Political stability in Bulgaria remains crucial for the adoption of the euro in 2026, read the conclusions of the latest analysis of the analytical unit of ING bank - ING think, entitled "Monitoring Bulgaria: Euro adoption is within sight, but not there yet" and publised on Friday.

The experts maintain their forecast that the country will join the euro area in January 2026. "However, we must acknowledge that some uncertainties are beginning to emerge around this forecast as well. The short-term rise in inflation could become a more significant issue, potentially shifting the decision from a technical to a more political one," ING think said, adding that a key factor to monitor is the liberalisation of the electricity market.

"We expect CPI inflation to end this year at 4.6% and next year at 3.0%," the Netherlands-based bank's analytical unit forecast.

Potential changes in the parliament structure could introduce further uncertainties, especially if the recounting of votes leads to new parties entering the scene, the analysis adds.

It was published just hours after the Central Electoral Commission (CEC) set a new 4% barrier for entry into parliament for the elections to the 51st National Assembly. Following the CEC's decision, the seats in the National Assembly were redistributed and the Velichie [Grandeur] party, which had initially failed to pass the barrier to enter parliament, was given 10 seats.

With these factors in mind, the January 2026 estimate for euro adoption is not without concerns, specifies ING think.

"Ultimately, we believe that the most important criterion for Bulgaria’s euro adoption is the unwritten one of political stability. If that is achieved, the other elements are more likely to fall into place," the document reads. 

Regarding the outlook for the Bulgarian economy, ING think continues to believe that growth will remain robust and will reach 2.6% in 2025.

"The recent wage advancements and an expansionary fiscal policy should continue to benefit private and public consumption. Moreover, the Schengen ascension and broader regional projects like the Vertical Gas Corridor, Nato-led infrastructure upgrades and the Three Seas Initiative should also bring some early benefits to activity and productivity".

The political uncertainty could weigh on investments, the analysis warns.

Industrial activity has continued to remain in negative territory, reflecting the ongoing weakness of key trading partners such as Germany and Romania, ING think adds.