Romania's current account balance turned to a EUR 878mn deficit in the first half of the year from a EUR 123mn surplus in the like period of 2013, the statistics office reported on Aug 13.
The current account gap in the 12-month rolling period ending in June edged up to EUR 2.5bn [1.8% of GDP] from EUR 2.1bn [1.4% of GDP] at the end of May, according to IntelliNews calculations. A consensus forecast (based on data of the state forecasting body and on independent entities like the IMF and rating agencies) sees the country's current account gap at around 2% of GDP in the medium term.
According to our calculations, based on unrevised Jan-May data, the C/A gap has widened markedly in June - when it expanded by 7.75 times on the year to EUR 527mn.
The causes of current account balance deterioration in both cases - June alone and the full first half, are ranked by their importance: i. higher outflows under the incomes account [dividends of FDI companies, re-invested or not]; ii. certain deterioration in the trade balance with goods [higher deficit]; and iii. lower inflows under the current transfers account [weak EU funds absorption].
RISING NET EXPORT OF SERVICES. The country's traditional trade gap in the goods section is being gradually offset by the robust growth of exports of services. Gross exports of services increased by 15% y/y to EUR 5.76bn in H1. Net exports of services increased by 50% y/y to EUR 1.86bn. The gap in the trade with goods was only EUR 1.67bn for the six-month period therefore the overall trade gap for goods and services turned to surplus in the first half of 2014 [EUR 193mn] from a EUR 215mn deficit a year earlier.
The January-June data confirm the growing pattern of the country's exports of services, after in 2013 the gross exports of services increased by 22% and the net exports of services more than doubled to EUR 2.59bn [1.8% of GDP].
CA balance EUR mn | 2013 | 2013 | 2013 | 2014 | 2014 | 2014 | Balance | Balance |
January-June | Inflows | Outflows | Balance | Inflows | Outflows | Balance | y/y ch. | y/y ch. |
Current Account | 32,786 | 32,663 | 123 | 35,329 | 36,207 | -878 | -814% | -1,001 |
A. Goods and Services | 28,719 | 28,934 | -215 | 31,277 | 31,084 | 193 | -190% | 408 |
a. Goods | 23,716 | 25,168 | -1,452 | 25,522 | 27,187 | -1,665 | 15% | -213 |
b. Services | 5,003 | 3,766 | 1,237 | 5,755 | 3,897 | 1,858 | 50% | 621 |
- transport | 1,769 | 625 | 1,144 | 2,032 | 663 | 1,369 | 20% | 225 |
- tourism and travel | 460 | 690 | -230 | 590 | 702 | -112 | -51% | 118 |
- other services | 2,774 | 2,451 | 323 | 3,133 | 2,532 | 601 | 86% | 278 |
B. Incomes | 575 | 2,268 | -1,693 | 509 | 3,481 | -2,972 | 76% | -1,279 |
C. Current Transfers | 3,492 | 1,461 | 2,031 | 3,543 | 1,642 | 1,901 | -6% | -130 |
Source: BNR |
The balance for June alone was based on unrevised Jan-May data.
CA balance EUR mn | 2013 | 2013 | 2013 | 2014 | 2014 | 2014 | Balance | Balance |
June | Inflows | Outflows | Balance | Inflows | Outflows | Balance | y/y ch. | y/y ch. |
Current Account | 5,724 | 5,792 | -68 | 5,785 | 6,312 | -527 | 675% | -459 |
A. Goods and Services | 4,997 | 5,026 | -29 | 5,323 | 5,335 | -12 | -59% | 17 |
a. Goods | 4,024 | 4,210 | -186 | 4,247 | 4,598 | -351 | 89% | -165 |
b. Services | 973 | 816 | 157 | 1,076 | 737 | 339 | 116% | 182 |
- transport | 313 | 118 | 195 | 388 | 132 | 256 | 31% | 61 |
- tourism and travel | 84 | 153 | -69 | 113 | 128 | -15 | -78% | 54 |
- other services | 576 | 545 | 31 | 575 | 477 | 98 | 216% | 67 |
B. Incomes | 149 | 560 | -411 | 82 | 770 | -688 | 67% | -277 |
C. Current Transfers | 578 | 206 | 372 | 380 | 207 | 173 | -53% | -199 |
Source: BNR |
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