Romanian exports’ growth stays robust at 7.9% y/y in May and at 5.0% in Apr-May 2014

By bne IntelliNews July 11, 2014

Romania’s exports increased by 7.9% y/y to EUR 4.34bn in May thus returning closer to the two-digit growth rates seen in the first quarter of 2014 and in 2013, the statistics office reported. For Apr-May 2014, exports advanced by 5.0% y/y, slowing down from the 10.1% y/y jump in Q1.

DRIVERS OF EXPORTS. In Jan-May, Romania’s exports advanced by 8% y/y against a 7.3% full-year performance projected by the government’s forecasting body CNP for 2014. Exports of i. transport means, including but not limited to cars, as well as ii. food items and iii. petroleum products have contributed to the 8% annual expansion in Jan-May. Each of these three categories of goods has increased its share in total exports compared to last year to 43.6%, 7.3% and 6.4%, respectively. Notably the share of petroleum products increased by 2pps from only 4.4% in Jan-May 2013.

The exports in the rolling 12 months increased by 10.9% y/y to EUR 51.15bn in May. For full 2014, CNP expects EUR 53,18bn exports.

STEEPER IMPORT RISE, WIDER DEFICIT. Imports also returned to higher levels in May when they increased by 8.1% y/y to EUR 4.88bn [CIF terms]. Notably, imports increased in both April and May steeper than exports - which happened rarely in the past years when on average exports have expanded at steeper rates. Consequently, the trade gap widened by 9.2% y/y to EUR 535mn in FOB/CIF terms in May – and by 9.9% y/y to EUR 333bn in FOB/FOB terms in the month. The FOB/FOB trade gap in the rolling 12 months still contracted by 41% y/y to EUR 3.47bn at end-May however slightly widening over the past several months.

IMPACT OF RISING CONSUMPTION. The rise in imports is consistent with the moderate recovery in consumption, particularly as the public and private investments remain at very low levels. The local currency has slightly strengthened in real and nominal terms in the year to date period – but on an annual basis in May, it was not particularly strong, so in principle the exchange rate should not be attributed a particular role in the dynamics of exports/imports. Nonetheless, the combination of more stable nominal prices and rising wages/employment could explain the rise in consumption. Definitely, the very low deposit interest rates also explains the households’ allocation of resources.

  2010 2011 2012 2013 Q4 13 Q1- 14 Apr’ 14 May’ 14
FOB Exports (in EUR mn) 37,368 45,275 45,056 49,563 13,083 12,757 4,176 4,342
FOB exp. %, y/y 28% 21% 0% 10% 13.3% 10.1% 2.2% 7.9%
CIF Imports 46,902 54,948 54,703 55,265 14,612 13,872 4,812 4,876
CIF imp. %, y/y 20% 17% 0% 1% 4.6% 9.6% 2.6% 8.1%
FOB Imports* 44,968 52,683 52,447 52,986 14,010 13,300 4,613 4,675
FOB/CIF Balance -9,534 -9,674 -9,646 -5,702 -1,530 -1,115 -635 -535
Balance y/y -3% 1% 0% -41% -36.7% 3.5% 5.7% 9.2%
FOB/FOB Balance* -7,600 -7,408 -7,391 -3,423 -927 -543 -437 -333
Balance %, y/y* 11% -3% 0% -54% -49.6% -2.2% 7.2% 9.9%
Source: INS, *IntelliNews estimates


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