site.btaFinance Ministry Confident Bulgaria Will Meet Euro Area Inflation Criterion

The Bulgarian authorities are confident in meeting the inflation criterion for joining the euro area and intend to make a formal request to the European Commission (EC) and the European Central Bank (ECB) for the preparation of extraordinary Convergence Reports in accordance with the National Assembly Decision of 2024, the Ministry of Finance said Friday in response to a BTA query.

According to Eurostat data on inflation in EU countries published on January 17, the reference value of the price stability criterion for December 2024 is estimated at 2.5%. Inflation in Bulgaria for the same period is 2.6%, which means that with data as of December 2024 inflation is 0.1 percentage points above the reference value, the Ministry said.

The statement explains that according to the provisions of the Treaty on the Functioning of the European Union, price stability is present when the average inflation rate over a period of one year prior to the review does not exceed by more than 1.5 percentage points that of the three best-performing EU Member States. The 12-month average rate of inflation according to the Harmonized Index of Consumer Prices (HICP) is used to calculate the price stability benchmark by taking the arithmetic average of the inflation rates in the three countries with the lowest inflation rates in the corresponding month and adding 1.5 to it.

In calculating the benchmark, price dynamics in countries defined as statistical outliers are also taken into account if the inflation rate is significantly lower than in other Member States due to the accumulation of country-specific factors, the Finance Ministry said.