Romania’s current account deficit widens by 71% yoy in September

Romania's current account (CA) deficit widened by nearly 71% year-on-year in September to EUR 1.44 billion, Romania's National Bank (BNR) reported.

In the first eight months of the year, the CA deficit had narrowed by 11.3% to EUR 6.30 bln. For the entire January-September period, the EUR 7.74 bln CA gap (some 3.8% of this year's projected GDP) maintains a 2.6% annual contraction.

In September, the net import of goods increased more than in the first ten months of the year: by 29% yoy, compared to the 7.4% yoy advance in Jan-Aug. Furthermore, the wage remittances decreased more than in Jan-Aug: by 37% yoy in September compared to 20% yoy in Jan-Aug.

The dividends generated by the foreign direct investment companies increased - this move reversing the trends, with a positive impact on the CA balance, seen in the first half of the year. Over the past nine months of the year, the dividends generated by the FDI companies still decreased by EUR 640 mln (-11.3% yoy).

Finally, the transfers of funds from abroad to the public administration sector (from the European Union's budget) unexpectedly came to a standstill in September: EUR 13 million, versus EUR 129 mln in the same month last year. In the first eight months of the year (Jan-Aug), the inflows to the public administration sector under the secondary income account increased by 26% year-on-year to EUR 1.16 bln.

The transfers to the private sector, including informal wage remittances and EU financing for the private sector, were 7.5% lower than last year.

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