Romania: Ever widening current account
The current account (C/A) deficit reached €6.62 billion in January-September 2018. That is 3.3% of GDP, the highest since 2012
In line with the recent slowdown of the trade balance widening, the C/A gap expanded in September 2018 by a less ample €619 million, reaching €6.62 billion for the entire January-September 2018 period. This is a respectable and worrying 39% higher than the same period of 2017. The relative slowdown in the trade balance widening is certainly welcomed, though it might be too little too late to trigger a meaningful change in this year’s picture.
C/A breakdown and its financing (% of GDP)
January-September C/A (% of GDP)
On a 12-month rolling basis, the total external position remained in negative territory at -€0.6 billion. Though growing for the fourth consecutive month, foreign direct investments (FDIs) cover only 52% of the C/A deficit.
FDI coverage
We have already revised our 2018 forecast for the C/A deficit to 4.2% of GDP, mentioning the persistent widening of the trade balance despite the economy slowing down this year, a levelling off of surpluses on the services balance and sluggish absorption of EU funds. Today’s data confirms our view.
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Download
Download snap