Romania’s current account gap widens by 47% YoY to EUR 11.5 bln in Jan-Sep

The current account (CA) has increased to EUR 11.5 bln (5.1% of GDP) in January-September, 47% more compared to the same period last year, the National Bank of Romania (BNR) announced.

The trade deficit (goods and services) surged by 47% YoY to EUR 9.8 bln, but the balances of the primary and secondary income accounts have deteriorated as well.

The primary income deficit (dividends, interest derived by foreign investors) increased slightly (+6% YoY) to EUR 2.5 bln while the secondary income surplus (transfers, such as from the EU budget) decreased by 32% YoY to EUR 817 mln.

The CA deficit measured 3.6% of GDP in the first nine months of 2020 and 3.7% of GDP in 2019 - all ratios based on the four-quarter GDP as of the end of June (latest data available). The 12-month rolling CA deficit rose to EUR 14.6 bln (6.1% of GDP) as of September 2021, up from EUR 10.5 bln (4.8% of GDP) one year earlier and EUR 10.8 bln (5.1% of GDP) in September 2019.

The European Commission under the Autumn Forecast projects that Romania’ CA gap to GDP ratio will reach 6.5% this year and slightly decrease over the coming two years, remaining above 6%. The main CA element would be the trade gap (goods), driven by robust demand for consumption and investments and seen close to 10% of GDP over the 2021-2023 forecast period (9.8% of GDP this year).

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