Romania's current account gap in January-November widens by 60%

Romania’s current account (CA) deficit widened to EUR 8.73 billion in January-November last year, nearly 60% more than in the same period of 2017 (y/y terms), the central bank informed. The wider CA gap (besides the inflation that accelerated last year to 4.6% from 1.3% in 2017) is already exerting pressures on the nominal exchange rate, which remained highly stable over the previous years. When it comes to the drivers of the CA widening, all the major accounts contributed to various degrees: the net deficit in the trade of goods and services widened by 91% y/y to EUR 5.68 billion and accounted for the largest part of the overall CA deficit. But the deficit of the primary incomes (largely expressing the net revenues derived by foreign investors, portfolio and direct) increased by 5.6% y/y to an outstanding volume of EUR 4.94 billion. Since the beginning of the year, the volume of dividends and interest derived by foreign investors exceeded the volume of foreign investments inflows with an overall negative impact on the external balance. Separately, the surplus of secondary incomes (largely speaking transfers from the European Union budget and other transfers) decreased by 14% y/y to EUR 1.88 billion. editor@romania-insider.com (photo source: Pixabay.com)