Romania’s trade gap shrinks for fourth consecutive month in August

The deficit of Romania’s trade in goods has contracted by 10% y/y to EUR 2.6 billion in August, marking the fourth consecutive month of negative annual dynamics. The deficit in 12 months to August eased to EUR 34.4 billion, down from EUR 35.7 billion calculated in 12 months to April.

The trade deficit to GDP ratio consequently eased from 9.9% in April to 9.6% in June and is probably closer to 9% as of August, considering the rise in GDP combined with a smaller deficit.

The weaker consumer demand, already visible in August (when the retail sales dropped by 4% y/y), is likely to contribute to weaker imports in the coming quarters, while the exports’ performance still depends on the economic recovery in Europe.

In August, exports rose by 3.6% y/y to EUR 6.77 billion, while imports contracted by 0.5% y/y to EUR 9.38 billion.

In the 12 months to August, the rise in imports (+4.6% y/y) still exceeds the exports’ dynamics (+3.1% y/y), with the trade gap (EUR 34.4 billion) advancing by 8.9% y/y.

The country’s trade gap was deteriorating at a faster pace in the past, however: by 10.6% y/y in July and by more than 20% y/y in February-April.

(Photo source: Andreykuzmin/Dreamstime.com)