Romania’s current account deficit widens by 70% in H1

Romania’s current account (CA) deficit widened to EUR 12.3 bln in the first half of 2022, 70% more compared to the same period last year, according to the National Bank of Romania (BNR). The CA gap reached a new record (EUR 2.65 bln) in June.

Based on the latest 12-month GDP data, as of the end of March, the CA to GDP ratio already reached 5.0% in the first half of the year, compared to 3.3% in the same period of 2021. For the 12-month period ending June, the CA deficit hit EUR 21.85 bln or 8.8% of GDP - 55% more compared to the CA gap in the previous 12-month period when it accounted for only 6.4% of GDP.

The breakdown of the CA gap in H1 points to net imports of goods (EUR 14.45 bln) as the dominant element both for the period’s overall deficit and for the deterioration in the overall deficit: they deepened by 41% yoy.

The net outflows of primary incomes, namely interest and dividends generated by foreign investments, also increased sharply: by 85% yoy to EUR 2.93 bln. The net exports of services (EUR 4.75 bln) increased by 11.4% yoy thanks to all segments except for tourism where the deficit widened by 63% yoy to EUR 1.39 bln.

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