Romania’s trade deficit in the first two months of this year narrowed by 5.3% compared to the same period last year, to EUR 4.4 bln amid a combination of lower oil prices, lower imports of natural gas (after the buffers had been filled in late 2022) and subdued industrial activity.

The figures send rather a negative message (subdued economic activity) than heralding a more sustainable external balance.

When it comes to food (food and live animals), the deficit, however, nearly tripled to EUR 755 mln while the net import of transport means (automobiles, but also public transport means as well) quadrupled to EUR 291 mln.

On the upside, the net import of chemicals – the main contributor to Romania’s trade deficit – eased by 9.4% YoY to EUR 2.1 bln. The net imports of mineral fuels (natural gas included) and petroleum products plunged even more, from EUR 1.2 bln to EUR 557 mln. 

Romania’s trade gap (goods) is the largest, in absolute terms, among those of the central and east European countries – but the deficit-to-GDP ratio is not. Country’s EUR 34.1 bln deficit in 2022 accounted for 11.9% of GDP, less than Latvia’s and Lithuania’s and not far from Estonia’s 10%. Croatia, however, leads with a deep gap of 26.8% of GDP, balanced by substantial export of services (tourism), which is not the case in Romania.

Last year may not be the best benchmark for assessing regions’ external balance, though. The balance of many countries was deeply hit by the energy prices and substantial expenses dedicated to building up natural gas and oil buffers (partly not used during the period).

The region’s non-consolidated trade gap accounted for 5.9% of GDP in 2022, up from 1.1% of GDP in 2019.

Poland and Hungary moving from a (small) surplus to a significant deficit made the biggest impact, besides Romania. The Czech Republic and Slovenia are the only countries still holding a trade surplus in 2022.

iulian@romania-insider.com

(Photo source: Andreykuzmin/Dreamstime.com)