Romania’s C/A gap shrinks four times to 1.1% of GDP in 2013

By bne IntelliNews February 13, 2014

Romania’s current account deficit narrowed 74% y/y to EUR 1.5bn in 2013, the central bank reported. The C/A gap thus shrank four times to 1.1% of GDP from 4.4% of GDP in 2012. 

In the previous four years [2009-2012], the C/A gap hovered between 4.2%-4.5% of GDP. Before the balance of payment correction incurred in 2008-2009, the gap reached 13.4% of GDP in 2007 driven by strong inflows that spurred consumption and the real estate bubble.

In 2013, the C/A gap contraction was driven by the major 87% drop in the deficit of trade with goods and services. This was partly offset by the 45% larger deficit under the incomes account. Compared to the EUR 4.34bn narrowing of the C/A gap, the trade gap decreased by EUR 5.41bn. The outflows under the incomes account [debt service, dividends] increased by EUR 1.36bn, offsetting part of the improvement in the trade sector. The net inflows under current transfers sector [EU funds, wage remittances] increased by 8.7% y/y to EUR 287mn, contributing to a small extent to the external balance's improvement.

FDI HITS LARGEST LEVEL SINCE 2009

Non-residents’ direct investment in Romania increased by 26.8% y/y EUR 2.7bn. Out of them, equity stakes consolidated with the estimated net loss of the FDI companies amounted to EUR 1.78bn and intragroup loans to EUR 937mn.

C/A (EUR mn) 2005 2006 2007 2008 2009 2010 2011 2012 2013
                   
Current Account -6,884 -10,155 -16,713 -16,157 -4,915 -5,518 -5,924 -5,843 -1,505
% of GDP* -8.7% -10.4% -13.4% -11.6% -4.2% -4.4% -4.5% -4.4% -1.1%
A. Goods and Services -8,155 -11,755 -17,345 -18,450 -7,165 -7,196 -7,069 -6,250 -836
   Goods -7,806 -11,759 -17,822 -19,109 -6,871 -7,600 -7,409 -7,379 -3,423
   Services -349 4 477 659 -294 404 340 1,129 2,587
B. Incomes -2,326 -3,246 -4,152 -3,683 -1,902 -1,914 -2,207 -3,025 -4,388
C. Current Transfers 3,593 4,845 4,820 5,976 4,154 3,592 3,338 3,432 3,719
FDI 8,725 8,723 7,049 9,310 3,554 2,238 1,815 2,140 2,713
% of full-year GDP 11.0% 8.9% 5.7% 6.7% 3.0% 1.8% 1.4% 1.6% 1.9%
% of CA deficit 127% 86% 42% 58% 72% 41% 31% 37% 180%
Source: BNR, IntelliNews                  

 

CA balance EUR mn 2012 2012 2012 2013 2013 2013 Balance Balance
Jan-Dec Inflows Outflows Balance Inflows Outflows Balance y/y ch. y/y ch.
Current Account 60,659 66,502 -5,843 67,526 69,031 -1,505 -74% 4,338
A. Goods and Services 53,472 59,722 -6,250 59,890 60,726 -836 -87% 5,414
a. Goods 45,070 52,449 -7,379 49,563 52,986 -3,423 -54% 3,956
b. Services 8,402 7,273 1,129 10,327 7,740 2,587 129% 1,458
            - transport 2,487 1,325 1,162 3,644 1,434 2,210 90% 1,048
            - tourism and travel 1,142 1,429 -287 1,225 1,499 -274 -5% 13
            - other services 4,773 4,519 254 5,458 4,807 651 156% 397
B. Incomes 1,380 4,405 -3,025 1,308 5,696 -4,388 45% -1,363
C. Current Transfers 5,807 2,375 3,432 6,328 2,609 3,719 8% 287
Source: BNR                

 

Related Articles

Almaty cost of living lowest among major cities

Kazakhstan’s largest city and business centre Almaty has dropped to last place on the Economist Intelligence Unit’s bi-annual ranking of the ... more

Bucharest urges local government to borrow from banks despite warnings from IMF and EC

Romania’s local administration can co-finance the EU-funded projects from bank loans at interest rates lower than the financing cost of the Treasury, Romania’s central government reportedly ... more

IPO of Romanian telco RCS&RDS reportedly planned for May

A group of shareholders of Romanian diversified telecoms group RCS&RDS want to sell 20%-30% of the group’s shares in an IPO, Ziarul Financiar daily reported. The IPO is expected to take place ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss