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 [email protected] 

 

Romania’s current account gap doubles in November

Romania's current account (CA) deficit roughly doubled to EUR 1.08 billion in November, from EUR 530 million in the same month of 2019, according to Romania's National Bank (BNR).

For the whole January-November period, the CA gap edged up by only 1.1% year-on-year, to EUR 9.76 bln (4.8% of GDP) after it regularly posted more moderate values during the first part of the year.

In the rolling 12 month period ending November, the CA gap neared EUR 10.6 bln (5% of GDP) - not far from the EUR 10.4 bln calculated in November 2019.

The steady deterioration of the foreign trade with goods through 2020 (and the years before) comes not as a surprise, and the dynamic of the primary income balance is also understandable, as it mainly reflects the outflows of dividends, interest derived by foreign investors, and wages earned by non-resident workers.

In November, the EUR 53 mln rise in the trade deficit with goods and services (to EUR 701 mln) explains a small part of the EUR 500 million CA gap widening compared to the same month of 2019.

The foreign investors indeed derived more dividends and interest, which pushed down the net outflows under the primary income account by EUR 162 mln to a deficit of EUR 302 mln.

But what was more surprising in November (and in the whole 2020), was the secondary income account, which in November turned to a negative balance (outflows) of EUR 77 mln from a surplus of EUR 248 mln in the same month of 2019.

The public administration account indicates outflows of EUR 280 mln in November and EUR 229 mln in Jan-Nov.

The account mostly reflects the donations, transfers, and grants in the account of the Romanian state - expected to rise sharply after the EU funds start flowing.

In contrast, the households' account under the secondary income section shows EUR 1.8 bln net inflows in January-November, just 3% down from the same period last year, indicating that the informal remittances remained relatively strong last year. 

(Photo: Octav Ganea/ Inquam Photos)

[email protected]

Normal
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 [email protected] 

 

Romania’s current account gap doubles in November

Romania's current account (CA) deficit roughly doubled to EUR 1.08 billion in November, from EUR 530 million in the same month of 2019, according to Romania's National Bank (BNR).

For the whole January-November period, the CA gap edged up by only 1.1% year-on-year, to EUR 9.76 bln (4.8% of GDP) after it regularly posted more moderate values during the first part of the year.

In the rolling 12 month period ending November, the CA gap neared EUR 10.6 bln (5% of GDP) - not far from the EUR 10.4 bln calculated in November 2019.

The steady deterioration of the foreign trade with goods through 2020 (and the years before) comes not as a surprise, and the dynamic of the primary income balance is also understandable, as it mainly reflects the outflows of dividends, interest derived by foreign investors, and wages earned by non-resident workers.

In November, the EUR 53 mln rise in the trade deficit with goods and services (to EUR 701 mln) explains a small part of the EUR 500 million CA gap widening compared to the same month of 2019.

The foreign investors indeed derived more dividends and interest, which pushed down the net outflows under the primary income account by EUR 162 mln to a deficit of EUR 302 mln.

But what was more surprising in November (and in the whole 2020), was the secondary income account, which in November turned to a negative balance (outflows) of EUR 77 mln from a surplus of EUR 248 mln in the same month of 2019.

The public administration account indicates outflows of EUR 280 mln in November and EUR 229 mln in Jan-Nov.

The account mostly reflects the donations, transfers, and grants in the account of the Romanian state - expected to rise sharply after the EU funds start flowing.

In contrast, the households' account under the secondary income section shows EUR 1.8 bln net inflows in January-November, just 3% down from the same period last year, indicating that the informal remittances remained relatively strong last year. 

(Photo: Octav Ganea/ Inquam Photos)

[email protected]

Normal
 

Romania Insider Free Newsletters