Romania’s current account deficit jumps 16 times to EUR 114 mln in January; FDI up 89 pct to EUR 362 mln

Romania’s current account balance of payment registered a deficit of EUR 114 million in January, 16 times higher compared to January 2018, while the foreign direct investment (FDI) increased by 89 percent to EUR 362 million, according to the National Bank of Romania (BNR).

In January 2018, the current account balance of payment registered a deficit of EUR 7 million.

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

„The deficit on trade in goods widened by EUR 476 million, while the surplus on primary income, that on secondary income and that on services expanded by EUR 181 million, EUR 141 million and EUR 47 million respectively,” the central bank said on Monday, in a press release.

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

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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.

On the other hand, non-residents’ direct investment in Romania totalled EUR 362 million in January, compared with EUR 192 million in January 2018, “of which equity (including estimated net reinvestment of earnings) amounted to EUR 341 million and intercompany lending recorded a net value of EUR 21 million,” BNR indicates.

In 2018, FDI in Romania totalled EUR 4.94 billion in 2018, compared with EUR 4.78 billion in 2017.