Romania’s current account deficit widens by 18 pct to EUR 1.2bn in Q1 2019; FDI down 20 pct

Sorin Melenciuc 14/05/2019 | 12:36

Romania’s current account balance of payment registered a deficit of EUR 1.21 billion in the first quarter of this year, up 18 percent compared to January-March 2018, while the foreign direct investment (FDI) declined by 20 percent to EUR 1.24 billion, according to the National Bank of Romania (BNR).

In January-March 2018, the current account balance of payment registered a deficit of EUR 1.03 billion.

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

„The deficit on trade in goods widened by EUR 895 million, the surplus on services income decreased by EUR 112 million, the primary income balance recorded a surplus of EUR 91 million compared to a deficit of EUR 589 million, and the surplus of the secondary income balance increased by EUR 142 million,” the central bank said on Tuesday, in a press release.

On the other hand, non-residents’ direct investment in Romania totalled EUR 1.24 billion in Q1 2019, compared with EUR 1.55 billion in Q1 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.

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