Romania’s current account deficit in 12 months to August drops to 7.0% of GDP

Romania’s current account deficit in 12 months to August drops to 7.0% of GDP
Romania's current account balance on a 12-month rolling basis / bne IntelliNews
By bne IntelliNews October 17, 2023

Romania’s current account (chart) deficit in the 12 months to August 2023 narrowed by 16% year on year to €21.30bn thanks to the sharp 37% plunge in August (to €1.91bn), the data published by the National Bank of Romania (BNR) show.

It is an improvement driven by low base effects, but the underlying structural elements that undermine Romania’s external balance have not changed. On the upside, the current account (CA) gap financing has not been under pressure recently. 

Given the high nominal advance of the GDP (+16.7% y/y in euros, as of the end of June), the CA gap to GDP ratio dropped to 7% at the end of August from 9.7% one year earlier. However, the CA gap measured only 6.6% of GDP in August 2021, before the war in Ukraine pushed up the energy prices. During the Covid-19 the gap narrowed to 4.5% while before the lockdown in August 2019, it was 5.0% – a level that is still 2pp below the current one. 

The CA deficit will remain between 6%-7% of GDP out to 2026, according to the S&P’s macroeconomic scenario published on October 13. Importantly, the rating agency underlines, non-debt-creating inflows in the form of EU funds and net foreign direct investments (FDI) will continue to fund a significant share of Romania's external deficit (about 60% on average over the next three years) and the central bank's international reserves. 

EUR bn / % of GDP Aug-19 Aug-20 Aug-21 Aug-22 Aug-23
CA balance 10.643 10.044 15.142 25.232 21.298
CA balance 5.0% 4.5% 6.6% 9.7% 7.0%
Trade balance 8.958 9.37 12.188 17.762 14.731
Trade balance 4.2% 4.2% 5.3% 6.8% 4.8%
Prim+Sec Acc balance 0.8% 0.3% 1.3% 2.9% 2.2%
           
FDI gross infl. 6.148 2.290  5.944 11.871 7.699
FDI gross. infl 2.9% 1.0% 2.6% 4.6% 2.5%
Reinvested prof. 1.985 3.081 4.529 6.434 4.912
Reinvested prof. 0.9% 1.4% 2.0% 2.5% 1.6%
source: BNR          

Related Content

Formation of ruling coalition in Romania faces deadlock as Social Democrats suspend talks

Russia reaps harvest of chaos in nearby democracies

The EU Council calls for a European geothermal action plan

Read in IntelliNews Pro
Get IntelliNews Pro

Related Content

Formation of ruling coalition in Romania faces deadlock as Social Democrats suspend talks

Russia reaps harvest of chaos in nearby democracies

The EU Council calls for a European geothermal action plan

Data

Russia’s CBR keeps key rate at 21% under pressure

In a surprise decision CBR governor Elvia Nabiullina kept interest rates on hold at 21% as she comes under mounting pressure from Russian President Vladimir Putin and the oligarchs who accuse her of destroying the economy.

Polish industrial production disappoints in November as output falls 1.5% y/y

Seasonally adjusted, output expanded 1.1% y/y in November, following a gain of 3.9% y/y the preceding month, GUS data showed.

Moldova's economy shrinks by 1.9% y/y in Q3

Economic performance was dragged down by agriculture, while manufacturing sector grew.

Kosovo's population down 12% since 2011

Falling population attributed to departure of many Kosovars to work abroad in search of a better life, a trend that persists across the Balkans.

Polish producer price deflation eases further in November

The PPI has been on a declining trend, reflecting the still relatively low demand linked to sluggish Germany economy and the domestic expansion only beginning to gain sustained momentum, analysts say.

Russia’s CBR keeps key rate at 21% under pressure
1 day ago
Polish industrial production disappoints in November as output falls 1.5% y/y
1 day ago
Moldova's economy shrinks by 1.9% y/y in Q3
1 day ago
Kosovo's population down 12% since 2011
2 days ago
Polish producer price deflation eases further in November
2 days ago

Follow Us On

Most Read

  1. Qatar-Turkey-Europe gas pipeline ambition could be back on following fall of Assad
    11 days ago
  2. FDI in Emerging Europe hit by geopolitical uncertainty and German slowdown
    3 days ago
  3. Russian sex workers are moving to occupied Ukraine to make six figures servicing soldiers
    9 days ago
  4. First major oil spill by Russia's shadow fleet as major storm rips oil tanker apart in Kerch straits
    6 days ago
  5. RAGOZIN: Does the exiled Russian opposition have a future?
    10 days ago
  1. UPDATED: Syria's former president Assad arrives in Moscow
    14 days ago
  2. Russia’s economy is tougher than it looks, no chance of a crisis in the next 3-5 years – CASE
    1 month ago
  3. EBRD warns of risks for emerging markets pursuing industrial policies
    25 days ago
  4. Qatar-Turkey-Europe gas pipeline ambition could be back on following fall of Assad
    11 days ago
  5. RAGOZIN: Does the exiled Russian opposition have a future?
    10 days ago

Reports

Dismiss