site.btaUPDATED Finance Minister Assen Vassilev Optimistic about Bulgaria Joining Eurozone on Jan. 1, 2025

In a BTA interview in Marrakech where the World Bank Group and the International Monetary Fund (IMF) are holding their annual meeting, Finance Minister Assen Vassilev expressed optimism that Bulgaria will join the eurozone on January 1, 2025. He stressed that the budget deficit as a share of Bulgaria’s gross domestic product is projected to amount to 3% by the end of 2023 and in 2024.

Regarding the State Budget Act, Bulgaria is expected to go to the international market with a debt issue by the end of 2023. Vassilev refused to comment on the specific size of this debt.

The Finance Minister said that increasing a country's shareholding in the IMF gives the IMF an additional opportunity to assist that country when needed. For Bulgaria, the issue is to maintain its current position in the Fund, as its IMF quota increase depends on it, Vassilev explained.

The IMF's main priority is to take care of the global financial system. The Bulgarian financial system is part of the European one, which in turn is part of the global one. This means that if there is a serious financial turmoil in the world, it will inevitably affect Bulgarian businesses and citizens, he said.

Asked to comment on the implementation of the state budget, which lagged behind by 3.5% in August 2023, year on year, Vassilev said that, looking at the revenue structure in the budget, there is a lot of revenue from the second payment under the EU Recovery and Resilience Plan to be received in December, as Bulgaria has already sent a request for this payment. In his words, the backlog comes mainly from revenues related to EU funds, where the implementation as of September is around 31% against normal figures of over 75%. "We expect revenues from the 2014-2020 EU programmes to be received in December, as well," Vassilev added. He stressed that tax revenue collection in on track.

Sharing his expectations for Bulgaria's economy by the end of 2023, Vassilev said that the IMF raised its growth forecast for Bulgaria this year, expecting slightly higher inflation within the forecast range. "Growth this year is better than the IMF expected, significantly better. We forecast that 1.8% growth will be met and we may even be close to the 2% barrier. The other thing I expect to see is that when the National Statistical Institute releases its final data for 2022, it will show what Eurostat also predicted - growth of 3.8-3.9%, which is higher than what has been announced so far [3.4%]," the Finance Minister emphasized.

Vassilev stressed that Bulgaria has a chance to meet its inflation criterion for joining the eurozone, but added that this does not depend entirely on Bulgaria. "Our inflation comes from the fact that there is a spike in prices across the EU. Here, its value is higher because food and energy are a much bigger part of the [small consumer price] basket. We have until April to see how the inflation criterion will deviate. But either way, I am optimistic that on January 1, 2025, Bulgaria will join the eurozone”, he added.

Vassilev expects the European Central Bank-approved Bulgarian National Bank draft bill, according to which the euro will be Bulgaria's new currency, to be adopted by Parliament until the end of 2023.