Romania’s foreign trade gap up only 10% YoY in January

Both exports and imports are seasonally low in Romania during the months of December and January, and this year was no exception: the exports increased by 6% YoY to EUR 7.16 bln and the imports by 6.8% YoY to EUR 9.50 bln in the first month of 2023, according to the statistics office INS. Given the price dynamics, this may well translate into shrinking foreign trade in volume terms.

For comparison, Romania’s GDP rose by 19% in 2022, when expressed in local or foreign currency (euro), largely thanks to a GDP deflator of roughly 13.5%.

The trade gap indeed widened by 10% YoY to EUR 1.95 bln – the smaller trade deficit in the past 12 months.

The state forecasting body expects no improvement in the country’s chronic external deficit. On the contrary, under the latest forecast issued on January 26, CNP expects Romania’s trade gap to widen by some 20% this year to EUR 39.9 bln as the exports are seen as rising by 10.6% YoY (to EUR 102.6 bln) and the imports by 12.5% YoY (to EUR 142.6 bln).

The drivers would be equally the final consumption, expected to slow down and advance by only 2.4%, but also the gross fixed capital formation (+6.2%).

The Government thus does not expect visible consolidation of Romania’s export capacity over the forecast period (until 2026). This should be one of the goals of the Resilience Facility, and hundreds of millions of euros given to private companies in grants for productive capacities.

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