The foreign trade gap in Romania narrowed by 15.6% y/y to €1.25bn in May, but the foreign trade numbers released by the statistics office INS on July 10 don’t bring much optimism.
Exports remained at roughly 60% of their level last year (€3.76bn, -40% y/y) and imports decreased by a slower rate (-35% y/y) to a still impressive €5.01bn.
The trade gap in the rolling 12 months ending May was just over €18bn, slightly easing from €18.26bn one month earlier. But the head of the foreign trade association, ANEIR, Mihai Ionescu, estimates that the gap might continue widening through the year to hit €20bn in the whole year.
Chances for the improvement of the trade with goods depend on investments in new production capacities, along with expectations of the re-location or at least dissipation of the major manufacturing hubs in Asia. But this is rather a long-term process, possibly largely overestimated and likely to lose ground once global developments return to normal and economic reasoning regains its dominant place. The government's plans for major investments in infrastructure are critical for making investments in manufacturing fundamentally sustainable.