site.btaIMF Expects Bulgaria to Join Eurozone in 2026, Says Its European Depratment Director

The International Monetary Fund (IMF) expects Bulgaria to join the euro area in 2026, IMF's European Department Director Alfred Kammer said in response to a question from the Bulgarian News Agency during the Fund's Spring Meetings in Washington, D.C. 

"The answer is definitely yes," Kammer said when asked whether the IMF assesses as possible for Bulgaria to join the eurozone in 2026.

IMF's European Department Deputy Director Helge Berger added that the Fund is following closely this topic. 

"I think it is clear that Bulgaria has made major progress towards fulfilling the conditions for the access to the Eurozone. We have seen deficits in line with the new fiscal framework of 3% and we have seen inflation coming down," Berger added. In his words, the next step is to discuss the issue at European level.

"We expect the process to continue from our end, this would be a welcome step for the country. Your accession means lower trading costs, more beneficial environments for the FDI flows and so on. There are a lot of upsides for the country, but of course it should enter strongly - just as strongly as it has performed in the last few years. That means taking of fiscal policy, remaining prudent, having an open eye on any financial sector risks that that could come, including from accession," he added.

Regarding the outlook for Europe, Kammer pointed out that in the short term the expected economic activity will be affected by a decline in productivity and shortcomings in reforms that need to be addressed. The IMF representative stressed that increasing trade is key for Europe and supports the European Union's efforts to conclude new trade agreements. "More trade is better," he stressed.

The IMF recommends accelerating labour market reforms, including retraining and up-skilling the workforce, which will have a significant economic impact.

According to the IMF, the European Central Bank (ECB) will cut its interest rates in the summer of 2025 by 25 basis points, Kammer added. The ECB is expected to keep the rate on hold at 2% unless major shocks ask for the recalibration of that monetary stance.

The IMF's European Department Director said there was optimism about Germany's new fiscal package, which could support growth and improve infrastructure despite the need for structural reforms and cutting red tape.