Romania’s CA gap widens by 28% y/y to 7.9% of GDP in 12 months to November

Romania’s current account (CA) deficit widened by 28% y/y to EUR 28 billion in 12 months to November 2024, amid the broad deterioration of the trade with goods and services and larger interest on external debt, according to data published by the central bank (BNR).

The CA to GDP ratio advanced to 7.9% in the 12 months, from 6.7% in the previous 12 months, based on EUR 355 billion estimated full-year 2024 GDP.

The government expects the CA deficit, largely driven by the public demand (general government deficit), to stabilize in nominal terms, bringing down the CA gap to GDP ratio to 7.4% in 2025 and 6.9% in 2026 once the fiscal consolidation gains ground.

The trade deficit in goods in 12 months to November 2024 reached EUR 32.8 billion, up 15% y/y or 9.2% of GDP, driven by robust demand for consumption and investments.

At the same time, the net export of services lost momentum and contracted by 14% y/y to EUR 11.5 billion as both key export drivers (IT and transportation) have dwindled recently. In contrast, the Romanians’ appetite for tourism increased (+10% y/y to EUR 9.6 billion spent abroad for such services).

The gross outflows generated by foreigners’ portfolio investment in Romania increased by 31% y/y to EUR 3.9 billion from under EUR 3.0 billion in the previous 12-month period, as both the value of the foreign debt and the interest rate have advanced.

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