Romania’s exports increased by 7.2% y/y to EUR 12.13bn in Q2, according to calculations based on statistics office data. In Q1 exports were 4.6% up on the year, therefore the combined growth rate for H1 was 5.9% y/y.

Although still far from the above-20% annual growth rates seen in 2010-2011, the exports’ performance this year is particularly encouraging.

Furthermore, imports decreased by 2.7% y/y in H1 on the back subdued demand and particularly subdued demand for energy inputs [natural gas, petroleum products, coal].

Consequently, the trade deficit narrowed significantly by 58% y/y* to EUR 1.47bn in H1. In Q2 alone, the trade gap shrank 60% y/y. For comparison, the trade deficit was roughly steady at EUR 7.4bn in full years 2011 and 2012.

The exports’ geographical orientation remains dominated by shipments to the EU area, which accounted for 70% of total exports in H1. The modest shift toward non-EU countries seen in Q1 faded away in Q2. Specifically, while the exports to the non-EU area increased steeper than those to the EU [by 10.9% y/y against 2.2% y/y] in Q1, the dynamics reversed in Q2 when the exports to EU countries strengthened above the average by 7.8% y/y versus the still strong 5.9% y/y advance of the exports to non-EU states.

For full H1, however, one can conclude that the exports to non-EU countries advanced stronger, supporting the scenario of a certain shift in the geographical orientation in Romania’s sales abroad.

The exports’ performance was visibly driven by the automobile industry. Exports of transportation means accounted for 42.7% of total exports in H1 this year, up from 40.9% in the like period of 2012. Exports of fuels and lubricants edged down to 4.7% of total from 5.4% last year as the refining industry witnessed certain outage periods in 2013.

* for the FOB/FOB trade deficit that we estimate based on statistics office data