Bulgaria will enter the Eurozone and become a full member of the Schengen area only in 2026, claims the Economist in its report.
According to their forecast, Bulgaria's main problem at the moment is political instability. Bulgaria could technically adopt the euro by 2025 if the country has a stable government and achieves price stability, but current conditions point to a delay. Continued political instability and inflation levels exceeding those permitted by the European Central Bank (ECB) are expected to hamper this deadline.
The forecast emphasizes that Bulgaria's capital expenditure program will continue to be highly dependent on EU funding.
Despite the potential for increased investment, the country's sizeable coal sector and the need for welfare programs for miners may hinder progress towards a green transition.
Bulgaria's business climate is expected to gradually improve, although the country is likely to remain less attractive compared to other Eastern European countries due to political instability and underdeveloped infrastructure.
Economic analysts believe that annual inflation in Bulgaria will fall from 9.5% in 2023 to 2.7% by the end of this year, mainly due to slower growth in energy and food prices, which make up a significant part of the consumer price index.
Inflation in Bulgaria will continue to be above the Eurozone average due to continued pressure from the service sector, wage increases and VAT changes.