Bulgaria's Inflation Blamed on External Factors, Not Euro Adoption

Bulgaria's Finance Minister Gulub Donev has attributed the country's rising inflation to external factors rather than its adoption of the euro, which took effect in January. The minister stated that Bulgaria is an open economy reliant on imports and has been affected by global shocks such as the crisis in the Strait of Hormuz and disruptions in the Black Sea region.

Donev pointed out that prices began to rise in the summer of last year due to increased electricity and fuel costs, and further exacerbated by low water levels in the Danube River. The country's wheat harvest has also been impacted, with record yields unable to be exported due to supply chain disruptions.

Despite Bulgaria ranking third in terms of inflation growth within the euro zone, Donev emphasized that adopting the euro has brought stability and predictability to the Bulgarian markets, resulting in increased investments and economic growth. However, the 5.1% annual increase in inflation poses challenges for the country.