Romania’s exports surged by 12% y/y to EUR 4.34bn in February, the statistics office reported. In Jan-Feb, exports were up 9.2% y/y – not far from the 10% y/y average advance in 2013.

The annual growth rate remains very high, but it will predictably slow down through the year on high base effects. This year’s crop, the activity of the country’s two automobiles plants and the utilisation rate of the Rompetrol refinery [recently upgraded] will mainly impact the magnitude of the slowdown – while the size of the economic recovery in Europe [where 70 of the exports are sent] is the main exogenous driver. The state forecasting body CNP expects, under its March 5 Spring Forecast, a 7.3% y/y rise in exports for the full year.

In the past 12 months ending February, exports were still 10% higher y/y.

IMPORTS RISE STEEPER THAN EXPORTS. Imports, however, increased even steeper than exports – by 14% y/y to RON 4.65bn [CIF*] in February and by 9.4% y/y in Jan-Feb. This resulted in a certain widening of the trade gap figures – by 51% y/y in FOB/CIF terms and by 206.4% y/y on FOB/FOB base. But for the current small values, high annual changes are not a particular concern.  

The FOB trade gap was only EUR 123mn in February – only 2.8% of exports, despite the impressing 206% annual surge. The trade gap is likely to slightly widen through the year as consumption picks up though. The forecasting body expects however only minor changes in the trade gap in whole 2014 – namely a certain contraction in FOB/FOB terms from 2.4% of GDP in 2013 and a marginal widening in FOB/CIF terms from 4.0% of GDP in 2014. The CA gap would slightly expand to a still moderate 1.2% of GDP in full year from 1.1% of GDP in 2013, under the March 5 CNP forecast.

IMPORTS DRIVEN BY EXPORTS, CONSUMPTION AND ENERGY. Imports were partly driven by industrial exporters bringing from abroad raw materials and unfinished goods. The modest pick-up in private consumption revealed by the 8.7% higher retail sales on the year in February [and 7% up y/y in Jan-Feb] has possibly contributed to the rise in imports. Finally, the imports of primary energy resources increased by 21.8% y/y in Jan-Feb. Imports of crude oil notably picked up by 62% y/y to 1.2mn tonnes in Jan-Feb and the imports of petroleum products were also up 44.5% y/y, yet to a modest 0.19mn tonnes in the period – which stands for higher utilisation rate of the upgraded refinery Rompetrol Rafinare.

* FOB imports were EUR 4.46bn, according to our calculations