European Central Bank Convergence Report concludes Bulgaria meets euro convergence criteria while urging further AML and CFT progress

The European Central Bank published its June 2025 Convergence Report on Bulgaria following Bulgaria’s request for a country examination, assessing whether sustainable economic convergence and legal convergence have been achieved for euro adoption. The ECB’s overall assessment is that Bulgaria meets the price stability, fiscal, exchange rate and long-term interest rate criteria, and that Bulgarian legislation is compatible with the EU Treaties and the Statute of the European System of Central Banks. On the economic criteria, Bulgaria’s 12-month average Harmonised Index of Consumer Prices inflation was 2.7% in April 2025, just below the 2.8% reference value, although the report expects inflation to rise in the coming months. Bulgaria was not subject to an excessive deficit decision, with a 2024 general government deficit of 3.0% of GDP and gross debt of 24.1% of GDP. The Bulgarian lev participated in the Exchange Rate Mechanism II over 20 May 2023 to 19 May 2025 without deviation from the central rate, while long-term interest rates averaged 3.9% over May 2024 to April 2025, below the 5.1% reference value. The report notes that Bulgaria has completed almost all ERM II post-entry commitments, but further progress is needed to address remaining shortcomings in anti-money laundering and countering the financing of terrorism, including elements of the Financial Action Task Force action plan adopted after Bulgaria was placed under increased monitoring in October 2023. The ECB report is being submitted to the Council of the European Union in parallel with the European Commission’s report, and the next regular ECB Convergence Report covering the other Member States with a derogation is scheduled for 2026.