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Bulgarian inflation may jump with euro adoption, Lagarde says
Published by Global Banking and Finance Review
Posted on November 4, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 4, 2025
2 min readLast updated: January 21, 2026
Bulgarian inflation may rise with euro adoption, warns Lagarde. Despite public concerns, the long-term benefits outweigh temporary inflation spikes.
SOFIA (Reuters) -Bulgarian inflation may jump when the euro currency is adopted on January 1 as retailers round up prices, but the impact will fade quickly and the benefits will be far greater, ECB President Christine Lagarde said on Tuesday.
Around half of Bulgaria's public oppose euro adoption, fearing that it will impinge on sovereignty and retailers will exploit the changeover to raise prices.
"This concern is entirely legitimate," Lagarde told a conference in Sofia. "Currency changeovers can produce a temporary uptick in measured inflation, often when firms round up prices during conversion."
At 4.1%, Bulgaria already had one of the highest rates of inflation in the European Union in September and the rate is now increasing, while euro zone inflation is broadly at the 2% target. If accession criteria were assessed now, Bulgaria might not meet them.
The one-off inflation jump is normally between 0.2 and 0.4 percentage points and it was around 0.4 percentage points in 2023 in Croatia, the last country to join the currency bloc, Lagarde said.
She argued that once accession takes place, uncertainty among citizens has naturally receded, making the benefits more obvious.
"The greatest risk countries faced was not losing sovereignty or seeing an increase in prices," Lagarde said. "It was losing reform momentum once inside the euro area, and thus missing out on the full benefits of the single currency."
(Reporting by Balazs Koranyi; Editing by Andrew Heavens and Kevin Liffey)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured as an annual percentage increase.
The euro is the official currency of the eurozone, used by 19 of the 27 European Union member states. It is symbolized by € and is managed by the European Central Bank.
The European Central Bank (ECB) is the central bank for the euro and administers monetary policy within the eurozone, aiming to maintain price stability.
Currency adoption refers to the process of a country transitioning to a new currency, which can involve changes in pricing, economic policies, and public perception.
Retailers are businesses that sell goods or services directly to consumers. They play a crucial role in the supply chain by providing products to end-users.
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