Romania’s current account (CA) deficit soared by 64% YoY to EUR 14.9 bln in January-July, according to the National Bank of Romania (BNR).

The CA gap in the 12 months to July rose by 52% YoY to EUR 22.6 bln or 8.7% of the annual GDP updated as of June.

The 12-month CA deficit was only 6.5% of GDP as of July 2021. It was 4.9% in 2019, before the series of external shocks that hit Romania’s economy over the past couple of years.

The two elements of the CA that have deteriorated significantly over the past year are the trade with goods and the outflows generated by foreign (direct and financial) investments.

Thus, the trade with goods added nearly EUR 5.3 bln to the country’s CA deficit in the first seven months of the year, out of the total EUR 5.8 bln increase in the CA gap compared to the same period last year. The net outflows under the “primary income” account, mainly reflecting the profits of the FDI companies and the interest achieved by foreign financial investors, added another EUR 2.5 bln.

On the upside, the surplus of the trade with services improved by EUR 1.7 bln and the net secondary incomes increased by EUR 0.3 bln. 

iulian@romania-insider.com

(Photo source: Nuthawut Somsuk/Dreamstime.com)