Romania’s current account deficit narrowed 74% y/y to EUR 1.5bn in 2013, the central bank reported. The C/A gap thus shrank four times to 1.1% of GDP from 4.4% of GDP in 2012.
In the previous four years [2009-2012], the C/A gap hovered between 4.2%-4.5% of GDP. Before the balance of payment correction incurred in 2008-2009, the gap reached 13.4% of GDP in 2007 driven by strong inflows that spurred consumption and the real estate bubble.
In 2013, the C/A gap contraction was driven by the major 87% drop in the deficit of trade with goods and services. This was partly offset by the 45% larger deficit under the incomes account. Compared to the EUR 4.34bn narrowing of the C/A gap, the trade gap decreased by EUR 5.41bn. The outflows under the incomes account [debt service, dividends] increased by EUR 1.36bn, offsetting part of the improvement in the trade sector. The net inflows under current transfers sector [EU funds, wage remittances] increased by 8.7% y/y to EUR 287mn, contributing to a small extent to the external balance's improvement.
FDI HITS LARGEST LEVEL SINCE 2009
Non-residents’ direct investment in Romania increased by 26.8% y/y EUR 2.7bn. Out of them, equity stakes consolidated with the estimated net loss of the FDI companies amounted to EUR 1.78bn and intragroup loans to EUR 937mn.
| C/A (EUR mn) | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 |
| Current Account | -6,884 | -10,155 | -16,713 | -16,157 | -4,915 | -5,518 | -5,924 | -5,843 | -1,505 |
| % of GDP* | -8.7% | -10.4% | -13.4% | -11.6% | -4.2% | -4.4% | -4.5% | -4.4% | -1.1% |
| A. Goods and Services | -8,155 | -11,755 | -17,345 | -18,450 | -7,165 | -7,196 | -7,069 | -6,250 | -836 |
| Goods | -7,806 | -11,759 | -17,822 | -19,109 | -6,871 | -7,600 | -7,409 | -7,379 | -3,423 |
| Services | -349 | 4 | 477 | 659 | -294 | 404 | 340 | 1,129 | 2,587 |
| B. Incomes | -2,326 | -3,246 | -4,152 | -3,683 | -1,902 | -1,914 | -2,207 | -3,025 | -4,388 |
| C. Current Transfers | 3,593 | 4,845 | 4,820 | 5,976 | 4,154 | 3,592 | 3,338 | 3,432 | 3,719 |
| FDI | 8,725 | 8,723 | 7,049 | 9,310 | 3,554 | 2,238 | 1,815 | 2,140 | 2,713 |
| % of full-year GDP | 11.0% | 8.9% | 5.7% | 6.7% | 3.0% | 1.8% | 1.4% | 1.6% | 1.9% |
| % of CA deficit | 127% | 86% | 42% | 58% | 72% | 41% | 31% | 37% | 180% |
| Source: BNR, IntelliNews |
| CA balance EUR mn | 2012 | 2012 | 2012 | 2013 | 2013 | 2013 | Balance | Balance |
| Jan-Dec | Inflows | Outflows | Balance | Inflows | Outflows | Balance | y/y ch. | y/y ch. |
| Current Account | 60,659 | 66,502 | -5,843 | 67,526 | 69,031 | -1,505 | -74% | 4,338 |
| A. Goods and Services | 53,472 | 59,722 | -6,250 | 59,890 | 60,726 | -836 | -87% | 5,414 |
| a. Goods | 45,070 | 52,449 | -7,379 | 49,563 | 52,986 | -3,423 | -54% | 3,956 |
| b. Services | 8,402 | 7,273 | 1,129 | 10,327 | 7,740 | 2,587 | 129% | 1,458 |
| - transport | 2,487 | 1,325 | 1,162 | 3,644 | 1,434 | 2,210 | 90% | 1,048 |
| - tourism and travel | 1,142 | 1,429 | -287 | 1,225 | 1,499 | -274 | -5% | 13 |
| - other services | 4,773 | 4,519 | 254 | 5,458 | 4,807 | 651 | 156% | 397 |
| B. Incomes | 1,380 | 4,405 | -3,025 | 1,308 | 5,696 | -4,388 | 45% | -1,363 |
| C. Current Transfers | 5,807 | 2,375 | 3,432 | 6,328 | 2,609 | 3,719 | 8% | 287 |
| Source: BNR |
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