Romania’s trade deficit (goods) contracted by 12% y/y to EUR 8.86 bln in the first four months of this year, the statistics office INS announced. Given the broad inflationary context, the improvement in the country’s external balance is even more impressive: the gap narrowed to 3.0% of the GDP in 12 months to March, compared to 4.0% in the same period last year. 

This improvement was mainly the result of mineral fuels trading: the net imports of mineral fuels nearly halved (-46% y/y) to EUR 1.34 bln in January-April this year. A favourable combination of volumes and prices contributed to this, rather than fundamental, sustainable drivers.

The net imports of mineral fuels accounted for only 15% of Romania’s total trade deficit in the four-month period, from 25% in the same period (January-April) last year. To some extent, this reflects high-base effects after high energy prices last year, and the pattern (comparatively lower net imports) will continue to support lower trade gaps throughout the whole year. But the energy markets remain volatile, and so does Romania’s mineral fuels trade balance.

Taking out the mineral fuels, Romania’s trade deficit in the first four months of the year remained roughly steady in nominal terms (-1% y/y to EUR 7.52 bln). But for some categories of goods, the trade gap has increased. 

The net import of food surged 2.5 times to EUR 1.28 bln – 14% of the total trade gap, from only 5% in the same period of 2022. Grain trading is playing a key role besides global food prices.

Romania features a long-term deficit in trade with consumer food goods, which is partly offset by the net exports of grains and live animals. The grain glut caused by the war in Ukraine and farmers’ expectations resulted in weaker exports in this category of goods this year.

Also, the net imports of machinery and transport equipment increased by 19% y/y to EUR 438 mln in January-April. Both exports and imports increased significantly and boast large shares: 44% of total exports and 36% of imports. 

iulian@romania-insider.com

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