Romania’s current account deficit widens by 19% yoy in Jan-Sep 2019

Romania’s current account posted a deficit of EUR 8.1 billion, in January - September 2019, 19.2% wider compared with EUR 6.8 billion in the same period of 2018, Romania’s National Bank (BNR) announced.

The deficit in the trade with goods reached EUR 12.1 billion, up by EUR 2.34 bln (23.9%) compared to last year, while the surplus in the trade with services increased by only EUR 343 mln (+5.5%), to EUR 6.59 bln.

The deficit of the primary income balance narrowed by EUR 747 mln (to EUR 4.04 bln), and the surplus of the secondary income balance decreased by EUR 53 mln (EUR 1.48 bln).

The current account deficit remains under pressure from weakening external demand and strong import growth underpinned largely by expansionary fiscal policies, Fitch rating agency mentioned in its latest report on Romania in November.

On a 12-month rolling basis the current account deficit has been close to 5% of GDP since May, driven by increasing trade deficit.

Fitch expects the deficit to remain around 5% of GDP during the next two years (compared with the current 1% median of the countries rated BBB in line with Romania), assuming no sharp fiscal deterioration and a gradual recovery in external demand by 2021.

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