Data revisions aside, the June deterioration came mainly from secondary income and to some extent from a lower services surplus. On the year, both are lower by 16% and 7%, respectively compared to 2017. The trade deficit seems to have levelled off a bit but was still 14% wider, coming in at €5.9 billion in the first six months of 2018.
January-June C/A balance (euro bn)
On a 12-month rolling basis, the total external position still remains in positive territory at €0.9 billion, with July foreign direct investment marking a 14-month low at €69 million.
As mentioned in our previous note, so far there are no convincing signs of a correction in the external imbalance. We maintain our 3.7% of GDP current account deficit forecast for 2018 with the risks tilted to the upside, due to rather sluggish FDI, relative strength in the Romanian leu and lack of a meaningful fiscal consolidation.