Romania’s trade gap shrinks amid cheaper energy and subdued domestic demand

The trade deficit (goods) of Romania narrowed by 32% y/y to EUR 2.28 billion in July, the sixth consecutive month that the country posted a smaller trade gap compared to last year.

Romania’s exports decreased by 3.0% y/y in July (after -1.5% y/y in June) to EUR 7.66 billion, but the imports plunged by 11.5% y/y (-5.5% y/y in June) to EUR 9.94 billion, the statistics office INS announced.

While both exports and (particularly) imports were rising rapidly in July 2022 on rising commodity prices, an opposite trend doubled by subdued economic activity and weakening private consumption is visible this year.

The trade gap in the rolling 12 months has gradually eased to EUR 30.9 billion in July (+4.4% y/y), or some 10% of GDP, down from EUR 34.3 billion in January.

The moderate nominal increase (+4.4% y/y) is significantly milder compared to the nominal increase in GDP (+17% y/y as of June), resulting in a smaller trade gap to GDP ratio: 10.2% as of July, down from 11.4% one year earlier.

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