Romanias C/A deficit narrows 73% y/y in January 2012.

By bne IntelliNews March 14, 2012
Romania's current account deficit narrowed by 73% on the year to a mere EUR 37mn in January, the central bank reported on its website. Usually, the foreign trade gap is small in the first quarter of the year due to seasonal effects. Yet, this time it was the current transfers, the net inflows from the EU budget plus wage remittances, that helped the country's C/A deficit contract. The foreign trade gap actually widened nearly fivefold on the year to EUR 301mn in January from EUR 62mn a year earlier. However, the net current transfers more than doubled to EUR 483mn from EUR 200mn in January 2011. Last year, Romania's C/A gap narrowed by 3% to EUR 5.679bn and the C/A deficit to GDP ratio improved from minus 4.5% in 2010 to less than minus 4.2% in 2011. The gap will be subject to pressures from possible widening in the foreign trade deficit this year, while better absorption of funds from the EU budget would offset at least part of the weaker external demand effects.
Romania C/A Balance
Jan-11 Jan-11 Jan-11 Jan-12 Jan-12 Jan-12 % y/y
Inflows Outflows Balance Inflows Outflows Balance Balance
Current Account 4,423 4,562 -139 4,798 4,835 -37 -73%
A. Goods and Services 3,906 3,990 -84 4,030 4,346 -316 276%
a. Goods 3,417 3,479 -62 3,465 3,766 -301 385%
b. Services 489 511 -22 565 580 -15 -32%
- transport 143 88 55 179 104 75 36%
- tourism 67 87 -20 82 101 -19 -5%
- other services 279 336 -57 304 375 -71 25%
B. Incomes 108 363 -255 103 307 -204 -20%
C. Current Transfers 409 209 200 665 182 483 142%
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