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Iulian Ernst
Senior Editor

Iulian studied physics at the University of Bucharest, and he sees himself as a physicist in the broadest sense of the word. He also studied economics at Charles University in Prague and Central European University in Budapest, after a master’s program in business administration at Bucharest Academy of Economic Studies. Since recently, he’s been exploring coding and data analysis for business and economics. As a freelancer, he worked for nearly two decades as an analyst for ISI Emerging Markets, Euromonitor International, Business New Europe, but also as a consultant for OMV Petrom and UkrAgroConsult. Iulian was part of the founding team of Ziarul Financiar. At Romania Insider, which he joined in 2018, he is reviewing the latest economic developments for the premium bulletins and newsletters. He would gladly discuss topics such as macroeconomics, emerging markets, Prague, energy sector including renewable, Led Zeppelin, financial services, as well as tech start-ups and innovative technologies. Email him at iulian@romania-insider.com. 

 

Romania’s CA deficit widens to 6.7% of GDP at end-Jul

Romania’s current account (CA) deficit, namely the outflows the country must cover from foreign direct investments, borrowing, or from its own forex reserves, has widened by 69% YoY to EUR 9.06 bln in January-July, the National Bank of Romania (BNR) announced.

Based on detailed data reported by the central bank, the 12-month rolling CA gap (Aug-20 to Jul-21) has increased by 52% over the previous 12-month period and reached EUR 15.13 bln, or 6.7% of the country’s GDP in the latest four-quarter GDP figure (as of Jun-21).

The annual growth rates, both the 69% YoY reported for Jan-Jul by BNR and the 52% YoY compiled for the rolling 12-month period, reflect in part the low base formed during the lockdown period - when the country posted smaller CA gaps as the foreign trade was disrupted.

The post-lockdown revenge spending (spending above normal levels due to deferred expenditures) might have played a role as well in the high CA gap readings recently.

Nevertheless, the lockdown only slowed down temporarily the deterioration of Romania’s external balance.

Compared to the Jan-Jul 2019 (before the crisis), the CA gap increased by 43%, at an annualised rate of nearly 20% p.a.

Similarly, the 12-month CA gap accumulated in Aug-20 to Jul-21 soared by 38% compared to the 12-month period ending July 2019, at an annualised rate of 17.5% p.a.

Over the same two-year period, the nominal GDP expressed in euros edged up by only 6.4% YoY or 3.1% p.a.(to EUR 226.6 bln as of Jun-21) - a rate dwarfed by the high double-digit growth rates boosted by the CA gap. 

(Photo: Dreamstime)

andrei@romania-insider.com

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Profile picture for user iuliane
Iulian Ernst
Senior Editor

Iulian studied physics at the University of Bucharest, and he sees himself as a physicist in the broadest sense of the word. He also studied economics at Charles University in Prague and Central European University in Budapest, after a master’s program in business administration at Bucharest Academy of Economic Studies. Since recently, he’s been exploring coding and data analysis for business and economics. As a freelancer, he worked for nearly two decades as an analyst for ISI Emerging Markets, Euromonitor International, Business New Europe, but also as a consultant for OMV Petrom and UkrAgroConsult. Iulian was part of the founding team of Ziarul Financiar. At Romania Insider, which he joined in 2018, he is reviewing the latest economic developments for the premium bulletins and newsletters. He would gladly discuss topics such as macroeconomics, emerging markets, Prague, energy sector including renewable, Led Zeppelin, financial services, as well as tech start-ups and innovative technologies. Email him at iulian@romania-insider.com. 

 

Romania’s CA deficit widens to 6.7% of GDP at end-Jul

Romania’s current account (CA) deficit, namely the outflows the country must cover from foreign direct investments, borrowing, or from its own forex reserves, has widened by 69% YoY to EUR 9.06 bln in January-July, the National Bank of Romania (BNR) announced.

Based on detailed data reported by the central bank, the 12-month rolling CA gap (Aug-20 to Jul-21) has increased by 52% over the previous 12-month period and reached EUR 15.13 bln, or 6.7% of the country’s GDP in the latest four-quarter GDP figure (as of Jun-21).

The annual growth rates, both the 69% YoY reported for Jan-Jul by BNR and the 52% YoY compiled for the rolling 12-month period, reflect in part the low base formed during the lockdown period - when the country posted smaller CA gaps as the foreign trade was disrupted.

The post-lockdown revenge spending (spending above normal levels due to deferred expenditures) might have played a role as well in the high CA gap readings recently.

Nevertheless, the lockdown only slowed down temporarily the deterioration of Romania’s external balance.

Compared to the Jan-Jul 2019 (before the crisis), the CA gap increased by 43%, at an annualised rate of nearly 20% p.a.

Similarly, the 12-month CA gap accumulated in Aug-20 to Jul-21 soared by 38% compared to the 12-month period ending July 2019, at an annualised rate of 17.5% p.a.

Over the same two-year period, the nominal GDP expressed in euros edged up by only 6.4% YoY or 3.1% p.a.(to EUR 226.6 bln as of Jun-21) - a rate dwarfed by the high double-digit growth rates boosted by the CA gap. 

(Photo: Dreamstime)

andrei@romania-insider.com

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