UniCredit: Romania's current account deficit up 45%

Romania recorded a current account deficit of EUR 4.2 billion in the first nine months of this year, up 45% over the same period in 2016. The trade deficit increased to EUR 8.2 billion during this period, up 26.2% year-on-year. Exports grew at an annual pace of 9.6% whereas imports rose by 12% year-on-year, according to a UniCredit analysis. The deterioration of the trade balance was an important factor behind the fluctuations in the foreign exchange market, according to the last transcript of the most recent meeting of the central bank. The pro-cyclic fiscal policies have had a bigger impact than anticipated and have fueled domestic demand. Given that the domestic production capacity has failed to accommodate the higher demand, the value of imports has increased. Structural measures rather than monetary policies will most likely be needed to balance the trade deficit, according to UniCredit. Romania’s current account deficit surpasses last year’s level editor@romania-insider.com