Romania’s current account (CA) deficit has widened by 55% to EUR 10.1 bln in January - August this year, compared to the same period of 2020, according to data from the National Bank of Romania.

The balances of all of its elements have deteriorated. The deterioration was massive (+43%) even compared to the first eight months of 2019.

The CA gap to GDP ratio has deteriorated from 3% in Jan-Aug last year to 4.5% in Jan-Aug 2020 and 3.3% in Jan-Aug 2019. The 12-month rolling CA gap has returned quickly during 2021 to the long-term upward trend that was discontinued during 2020 when the subdued economic activity and certain uncertainty (on both consumer and investment sides) had a positive impact on the country’s external balance.

The trade with goods accounts for the biggest part of the CA, and its chronic deficit has deteriorated by 20% YoY to EUR 14.4 bln in January - August. The EUR 2.4 bln rise of the net import of goods accounted for two-thirds of the deterioration of the CA gap (EUR 3.6 bln).

Nevertheless, the surplus of trade with services has decreased by 5.2% (EUR 309 mln), the primary incomes’ deficit (net inflows of revenues from work and capital/investments) deepened by 35% YoY (EUR 587 mln) and the surplus of secondary incomes (net transfers) decreased by 28% YoY (EUR315 mln).

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iulian@romania-insider.com