The deficit of Romania’s current account (CA) has widened by 37% y/y to EUR 29.4 billion in 2024, amid a deterioration in all its main segments: trade in goods and services, primary incomes (dividends, interest, wage remittances) and secondary incomes (transfers), according to data published by the National Bank of Romania (BNR).

The CA-to-GDP ratio deepened to -8.3% in 2024, based on the official 2024 GDP estimate (EUR 355 billion), from -6.6% in 2023 but still below the -9.4% in 2022 when the country’s external balance deteriorated under the pressure of costly energy imports. 

The 1.7 percentage points deterioration in Romania’s external balance is nearly entirely explained by the 3%-of-GDP widening of the general government budget deficit, considering the marginal impact of the public deficit to the external balance estimated by the Fiscal Council at 0.5pp for each 1pp widening of the budget deficit.

The trade in goods, EUR 32.9 billion, is the main element of Romania’s CA balance and it deteriorated from EUR 29.0 billion in 2023. The surplus in the trade in services (EUR 11.5 billion in 2024) has moderated by EUR 1.8 billion compared to 2023. 

The primary income balance, mainly reflecting net dividends, interest, and wage remittances declared as such, has also deteriorated by EUR 1.3 billion to a deficit (net interest and dividends derived by foreign investors, minus net wage remittances to Romania) of EUR 9.3 billion. 

FDI investors derived EUR 11.6 billion in revenues (not much changed compared to 2023), and portfolio investors derived EUR 3.6 billion in revenues (EUR 2.6 billion in 2023). In turn, the net wage remittances to Romania decreased to EUR 3.4 billion from EUR 2.4 billion in 2023. 

The net transfers from abroad contracted to EUR 1.3 billion in 2024 from EUR 2.2 billion in 2023, but this was not because of lower transfers in the private sector, where the net transfers actually improved slightly to nearly EUR 2.3 billion.

iulian@romania-insider.com

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