Romania’s foreign trade deficit narrowed by 5.6% y/y to €6.8bn in the first quarter of this year as imports of natural gas, and to a smaller extent imports of chemical goods, decreased, the statistics office INS announced.
The improvement, even more significant when judged in the context of larger nominal GDP, still hides negative developments in trade in food (where the trade gap nearly tripled) and chemicals, where the deficit remains particularly large despite a decline driven by lower prices and subdued economic activity.
The non-fuel trade deficit actually increased, since net imports of mineral fuels contracted by €900mn (to €1bn) while the overall trade gap contracted by only €400mn in the quarter. The import of natural gas plunged in January-February (latest data available) to only 35% of that in the same period last year and prices also moderated as reserves were still substantial across Europe.
Net imports of chemical goods also decreased slightly, by €300mn, but remained at a massive volume of over €3.3bn — nearly half of the entire trade deficit in the quarter. Imports eased by 3% y/y to €3.45bn in Q1.
In contrast, the net import of food increased to over €1bn in Q1 from just €360mn in the same period last year. Imports increased by nearly one quarter to nearly €2.9bn and exports dropped by 9.7% y/y to under €1.8bn. Romania imports mainly processed food while exporting to a large extent grain and live animals, for which prices have collapsed.