Romania’s current account (CA) deficit has widened to EUR 7.0 bln in January-June this year, 73% more than the same period last year, the National Bank of Romania (BNR) announced.

The main driver behind the increase was the higher trade deficit with goods: EUR 10.5 bln, EUR 1.56 bln more than in the same period last year. However, this accounted for just over half of the swelling of the CA deficit.

More than a third of the CA increase, namely EUR 1.11 bln, was caused by the deterioration of the deficit in the area of primary incomes (to a deficit of EUR 1.42 bln from EUR 305 mln). Specifically, the outflows under the primary incomes (dividends, interest generated by direct and financial foreign investors) rose by 31% or EUR 1.24 bln to EUR 5.27 bln.

A large part of this increase is formed by dividends generated last year (and registered with a delay) by foreign direct investment companies, which keep the money as retained earnings (also recorded as foreign direct investments).

The net inflows under the secondary income (transfers) deteriorated as well to only EUR 434 mln in January-June from EUR 710 mln in the same period last year.

andrei@romania-insider.com

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