Romania’s trade deficit widens as higher food sales spur imports

Romania’s exports grew by only 0.2% in September compared to the same month of last year while the imports went up by 4.9%, which led to a significant widening of the trade balance for the fourth month in a row. This comes to show that the increase in domestic consumption following the VAT rate cut on food and soft drinks has also spurred the imports. The total imports went up by 7.1% in the first nine months of this year, reaching EUR 46.4 billion, while the exports only increased by 4.7%, to EUR 40.9 billion. The trade deficit thus widened by 28%, or EUR 1.23 billion, reaching EUR 5.53 billion, according to data released by the National Statistics Institute (INS). The imbalances in international trading increased starting June after the VAT rate cut on food from 24% to 9%. The country’s imports increased by 9.2% in the four months ended September 30, compared to the same period of 2014, reaching EUR 21.6 billion. In the first five months, the imports went up only by 5.4% year-on-year, to EUR 24.8 billion. Food, beverages and tobacco increased their share in the total imports from 8.1% in the first five months of the year, to 8.5% in the June to September period. The food imports went up by almost a quarter (24.2%) in the last four months reported, compared to a 13.8% increase in the first five months of the year, Romania-Insider.com has calculated based on INS data. The exports were more stable, going up by 4.8% in the June-September period (compared to the same period of 2014) and by 4.7% in the first five months. Thus, most of the trade deficit increase came in the last four months of the analyzed interval. The deficit went up by EUR 960 million in the four months ended September 30, to almost EUR 3 billion. In the first five months of the year, the deficit was EUR 2.57 billion, only EUR 270 million higher compared to the similar period of 2014. Retail trade turnover rises by almost 7% in Romania on higher food sales editor@romania-insider.com