Romania’s imports dropped by 5.3% y/y to EUR 10.6 billion in November – the month when the wholesale traders bring in their merchandise for the peak retail sales, and the retailers’ business is gaining momentum. Exports edged down marginally by 0.1% y/y to EUR 8.4 billion in the same month, resulting in a trade deficit (EUR 2.26 billion) that was 21% y/y smaller compared to that seen in the same month of 2024. 

It was the second month when the trade balance improved significantly in annual terms, and the trade deficit in the 12 months to November (EUR 33.1 billion, 8.8% of GDP) is already 1.2% smaller compared to the previous 12-month period.

Considering the higher nominal GDP, the deficit-to-GDP ratio decreased significantly from 9.5% in 12 months to November 2024 or 9.8% in April 2025 - when the trade balance started to improve amid subdued demand for consumption.

A survey carried out by Avangarde in mid-December 2025 showed that 49% of the respondents were spending less or much less for the past Christmas season, compared to the previous season (2024), with 27% estimating constant spending and much fewer planning higher spending (16%) or much higher spending (2%). The significant consumer price inflation (around 10%) required more spending in December 2025 for the same amount of goods.

Retail sales data currently available show that retail sales have dropped by 3%-4% after the inflationary shock in July-August, which was prompted by the electricity price liberalisation and the VAT rate hike. More than that, the outlook of no wage or pension hike in the public sector and gloomier mood in the private sector has depressed the consumer sentiment, while no immediate reversal is expected.

The state forecasting body, under its latest projection (dated December 2025 but published recently), expects private consumption to decline by 0.8% this year, after a moderate 0.1% correction in 2025 – which would further put pressure on imports, which would increase by only 1.7% this year, half the growth rate seen in 2025. Of course, imports are driven by industry (which has not fared better recently) and investments as well (the major drive of domestic demand this year), so the private consumption tells only part of the trade gap’s story.

Under a broader perspective, Romania’s exports and imports have decreased as a ratio to GDP over the past decade. After subdued foreign trade during the pandemic period and a sharp rise in exports/imports due to price effects after the war in Ukraine, Romania’s exports decreased from nearly 35% in 2016 to 26% currently. The import-to-GDP ratio also reduced, from over 40% in 2016 to 35% currently. 

The positive explanation would be that the local economy is covering more of the domestic demand, while the pessimistic explanation consists of the faster advance in the prices of non-tradable (particularly services).

Irrespective of the causes behind the foreign trade dynamic, the trade gap has widened from some 6% in 2016 to 8.8% in 12 months to November 2025. The gap has, however, narrowed since April 2025 and reached one of the lowest levels in the past four years.

Contained demand for consumption in 2026 will likely further improve the country’s external balance.

iulian@romania-insider.com

(Photo source: Andreykuzmin/Dreamstime.com)