Romania’s current account (CA) deficit narrowed by 13.3% y/y to EUR 5.34 billion in the first quarter of the year (Q1) and by 3.4% y/y to EUR 29.1 billion in 12 months to March 2026, according to data published by the National Bank of Romania (BNR). In broader terms, the narrowing of the CA deficit is also consistent with fiscal consolidation in Q1, when the public deficit halved to 1.0% of GDP from 2.2% in the same period of 2025.

The main driver for Romania’s CA deficit narrowing was the contraction of the import of goods, in both gross (-2.1% y/y) and net (-11.7% /y) import of goods, caused by subdued consumption and economic activity in Q1: the retail sales plunged by 5.8% y/y and the GDP contracted by 1.7% y/y.

The CA deficit to GDP ratio for 12 months to March thus decreased to 7.7%, to be revised slightly downward after nominal Q1 GDP is released, from 8.4% calculated in March 2025.

Notably, the import of services increased by 12% y/y to EUR 7.7 billion in Q1, when the consumption of tourism services by Romanians surged by 17% y/y to EUR 2.1 billion, in contrast with the retail sales’ dynamics. 

On the downside, the net inflows of foreign direct investments in Romania also contracted, by nearly 30% y/y to EUR 1.05 billion in Q1 – hence faster than the CA deficit. The new equity inflows contracted by 21% y/y to EUR 612 million in Q1, while the reinvested profits plunged by 48% y/y to EUR 769 million. Notably, the FDI companies’ dividends edged up by 2.0% y/y to EUR 2.82 billion in the quarter. Separately, the balance of loans with the parent groups indicates a net repayment of EUR 328 million, 57% lower than the same period in 2025.

For the 12 months to March 2026, net FDI to Romania increased by 65% y/y to EUR 7.1 billion, driven by a combination of reinvested earnings (EUR 3.4 billion, up 52% y/y) and loans from parent companies (EUR 2.4 billion, ten times y/y), while the new equity contracted by 29% y/y to 1.3 billion. For the same period, the FDI companies’ dividends surged by 11% y/y to EUR 11.9 billion, resulting in a net margin of nearly 10%.

The gross FDI to Romania in the 12 months to March, EUR 7.6 billion (+60.7% y/y), accounted for 2.0% of GDP, up from 1.3% of GDP calculated in March 2025.

In regard to the other CA deficit financing sources, Romania’s gross external debt increased by just over EUR 3 billion during Q1, to EUR 179 billion, not including the intra-group loans that edged up marginally to EUR 51.6 billion. 

iulian@romania-insider.com

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