Economists advise to wait with the adoption of the euro because of inflation –

Economists advise to wait with the adoption of the euro because of inflation –
Economists advise to wait with the adoption of the euro because of inflation –

The adoption of the euro should be postponed for at least a few years. This opinion expressed before Kmeta.bg the economist Nadia Alexandrova. Expected from January 1, 2024 Bulgaria to be technically ready to accept the single European currency.

“Entering the Eurozone will lead to fewer problems for politicians, but it will cause higher prices and more problems for the average Bulgarian. The more reasonable approach is that of Romania – to wait for the period of high inflation to pass in order to solve and avoid problems related to the Eurozone, and for the adoption of the single currency to be possibly from 2029”, she argued.

The domino effect

The war in Ukraine affected the euro almost from the beginning. At the end of August, the common European currency reached its lowest value in 20 years. Since the beginning of the year, it has depreciated by 14 percent against the US dollar. According to Aleksandrova, the trend is long-term, and her forecast is that the euro will remain below one dollar. And due to the weak currency and of course, the expensive energy becomes even more expensive, which leads to inflationary pressure.

“The euro is currently a curse, because it further pumps up inflation”, Nadia Alexandrova is convinced. And he adds: “At other times, the devaluation of the euro may not be such bad news, but not now.” The economist reiterated the rule that money goes where there is a higher return, so the US dollar is currently benefiting from its traditional appeal as a safe haven in times of crisis.

The depreciation of the euro will burden households and businesses in Europe, which are already struggling due to record inflation, experts say. A weaker currency would make imports, which are mostly paid for in dollars, more expensive. If the imported products are raw materials or intermediate goods, their higher values ​​are more than normal, as a domino effect, to further increase final prices.

The article is in bulgaria

Tags: Economists advise wait adoption euro inflation

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