Romania’s foreign trade gap widens by 36% year-on-year in Jan-Mar

Romania’s exports increased by 3.2% year-on-year to EUR 17.53 billion, in the first quarter of 2019, while the imports advanced faster, by 7.4% year-to-year, to EUR 21.18 billion, the National Statistics Institute (INS) reported.

The trade deficit thus widened to EUR 3.64 billion in the first quarter of the year, 36% more than in the same period last year.

The gap already accounts for nearly 1.8% of the GDP projected for the whole year, but the Government’s forecasting body CNSP expects a rather wide gap (EUR 16.9 billion, 8% of GDP) for the entire year under the Spring Forecast issued this May. However, it also projects a small, 3.3%-of-GDP Current Account gap (down from 4.5% in 2019). This indicates the Government assumes a large volume of funds transferred from the European Union budget. This is consistent with easing pressures on the local currency (toward its weakening) expected under scenarios indicating a slight increase in the Current Account deficit over the coming years.

Under the same CNSP forecast, the Government admits that the imports will rise faster than exports this year (9.4% versus 8.9%), but the expected differential is smaller than that indicated by the actual dynamics of the Q1 figures (when the imports rose by 7.4% versus 3.2% advance of exports). The wider differential resulted in the trade gap widening faster than the more modest 11% increase projected by CNSP for the whole year.

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