Romania’s trade gap rose by 34 percent year-on-year in the first three months of this year up to EUR 3.64 billion, the highest trade deficit for this period since 2008, due to weak exports and surging imports, and experts warn that the country’s trade gap puts pressure on the local currency.
In March, Romania’s exports of goods remain flat (+0.4 percent year-on-year) at EUR 6.1 billion and were largely outpaced by imports which rose by 2.7 percent to EUR 7.36 billion, government data showed on Friday.
Analysts warn that this poor performance could have a severe impact on the local currency.
“There is very little good news. The relative levelling off in the food trade deficit was easily countered by other items with higher weight in the trade balance. We reiterate our view that the stable RON is on borrowed time,” UNG Bank analysts said in a research note.
Last year, Romania’s exports of goods increased by 8.1 percent to EUR 67.7 billion while imports rose by 9.6 percent to EUR 82.9 billion. The trade gap rose last year by 17 percent up to EUR 15.1 billion, the highest level since 2008.
In 2017, Romania’s trade gap surged 30 percent to EUR 12.96 billion, as the government adopted during the last few years a strategy of wage-led growth, stimulating household consumption and GDP growth rates.
But this model has generated larger fiscal and current account deficits and experts insist Romania should change the economic model in order to obtain real long-term economic and social development.