Bulgaria may join the Eurozone no earlier than 2024, the Fitch agency predicted in its latest report.
The experts from the rating agency consider the participation of the Bulgarian lev in ERM II and the country's entry into the Banking Union in July 2020 as an important milestone, as this is a two-year process of successful implementation of reforms and improved sustainability of the banking sector. It also reflects the commitment of the euro area authorities to the enlargement of the euro at a time when macro and political risks have increased significantly in Europe. The focus will now be put on fulfilling the convergence criteria for joining the euro area, on informal commitments specific to Bulgaria, including improving the anti-money laundering framework.
The agency reminds us that our country has additionally committed itself to undertake anti-corruption and judicial reforms. "Given the two-year minimum requirement to stay in ERM II and the usual assessment period of 6 to 12 months, we believe that the euro can be adopted as early as January 2024", predicted Fitch".
However, according to the agency, there is uncertainty as to when Bulgaria will meet all membership criteria, given the difference in living standard between BG and euro area countries.
Fitch expects Bulgaria's economy to shrink by 5.7% in 2020. Its expectations are worse than in April, when the forecast was for a decline of 5.1 percent. This reflects the adverse impact of the coronavirus pandemic on consumption, investment and exports.
Bulgaria's economy shrank by 9.8% in the second quarter.
