Romania's current account (CA) deficit increased by 4.8% (EUR 503 million) to nearly EUR 11 billion (5% of GDP) in 2020, Romania's National Bank (BNR) announced.

The deficit level is slightly above expectations. In its latest country review last December, international rating agency S&P said that it expected a slight narrowing of the CA gap in 2020 to 4.5% of GDP (from 4.7% of GDP in 2019) to reverse in 2021, resulting in a CA gap of around 5.1% of GDP over the coming years.

In its January projection, the state forecasting body CNSP correctly estimated the CA gap at EUR 10.9 bln (5% of GDP) - to remain steady in absolute value while slightly shrinking compared to the GDP.

The bulk of the deficit in 2020 remains in foreign trade with goods, where the deficit increased to EUR 18.7 bln, compared to EUR 17.4 bln in 2019.

The deficit of the primary revenues' balance also increased to EUR 3.84 bln from EUR 3.19 bln in 2019.

Meanwhile, the foreign trade with services posted a EUR 9.63 bln surplus, up EUR 981 mln from 2019.

The biggest share of the surplus in services is in the transport sector, namely EUR 4.2 bln in 2020, while the segment of tourism remains in the deficit area with net imports worth EUR 1.37 bln.

The balance of secondary revenues made an equally important positive contribution to the overall CA balance, which recorded a surplus of EUR 2.02 bln, EUR 543 mln higher than in 2019.

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andrei@romania-insider.com