Romania’s current account deficit widens by 38.5 pct to EUR 2.3 bn in Jan-Apr; FDI down 17 pct

Romania’s current account balance of payment registered a deficit of EUR 2.3 billion in the first four months of this year, up 38.5 percent compared to January-April 2018, while the foreign direct investment (FDI) declined by 17 percent to EUR 1.32 billion, according to the National Bank of Romania (BNR).

In January-April 2018, the current account balance of payment registered a deficit of EUR 1.67 billion.

The main source of the large external deficit is the negative trade balance.

„The deficit on trade in goods widened by EUR 1,273 million, the surplus on services income decreased by EUR 34 million, the deficit of the primary income balance decreased by EUR 817 million, and the surplus of the secondary income balance decreased by EUR 151 million,” the central bank said on Thursday, in a press release.

On the other hand, non-residents’ direct investment in Romania totalled EUR 1.32 billion in January-April 2019, compared with EUR 1.59 billion in the same period of 2018, “of which equity (including estimated net reinvestment of earnings) amounted to EUR 854 million and intercompany lending recorded a net value of EUR 389 million,” BNR indicates.

Romania’s current account deficit has exceeded in 2018 the warning threshold of 4 percent of GDP.

Last year, the current account balance of payment registered a deficit of EUR 9.42 billion – or 4.7 percent of GDP -, up 57.7 percent against 2017, while the FDI rose by 2.9 percent to EUR 4.94 billion.