Romania’s CA gap widens by 52% YoY to 9.2% of GDP in 2022

Romania’s current account (CA) deficit surged by 52% YoY to EUR 26.57 bln in 2022, driven by a wider deficit of the trade with goods but also by stronger outflows under the primary income balance (interest and dividends paid to foreign investors), according to data published by the National Bank of Romania (BNR).

The CA gap-to-GDP ratio increased from 7.3% in 2021 to 9.2% in 2022, based on the latest GDP estimate available from the state forecasting body CNP.

The same forecasting body expected a slightly wider CA gap in 2022 (EUR 27.4 bln) under the latest projection dated January 2023. But the external deficit in December (as well as November) was comparatively smaller – versus the previous months of the year. Thus, the CA gap in December (EUR 2.2 bln) was only 22% wider compared to December 2021, while the annual growth rate for the first eleven months of the year was +55% YoY.

Speaking of 2022 CA drivers, the trade with goods posted a deficit of EUR 32.3 bln, which was nearly 40% wider compared to 2021. It was a EUR 9.2 bln increase in absolute terms.

But the deficit of the primary income account (reflecting dividends, interest and wages – to a smaller extent) leapt up by 80% YoY to EUR 8.7 bln. It was a significant increase of nearly EUR 3.9 bln.

The net export of services increased by 33% YoY to EUR 12.5 bln, but the EUR 3.1 bln annual growth offset only a small part (less than 24%) of the combined advance of net import of goods and net outflows of interest and dividends.

(Photo source: Dreamstime.com)