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September 27, 2021

Romania lowers its debt

The current account deficit has dropped by 78.9 pc after the first our months, while the external debt has dropped by 1.71 pc, the Central Bank announced on Wednesday.

Romania’s balance of payments deficit has dropped by 78.9 per cent in the first four months of 2009 to EUR 1.182 bln, on the backdrop of the significant drop in the trade deficit and the high level of the current transfers’ surplus, according to the data published yesterday by the National Bank of Romania (BNR). Compared to March, when the balance of payments deficit totalled EUR 709 M, the external deficit has risen by EUR 473 M in April.

In the January – April period the trade deficit (FOB/FOB) – the main source that fuels the external imbalance – has dropped by 66.47 per cent to EUR 1.97 bln down from a level of EUR 5.875 bln registered in the same period last year.

According to the BNR data, at the end of April 2009 Romania registered a total external debt of EUR 71.755 bln, down by EUR 1.249 (1.71 per cent) from the level registered at the end of last year, in the context in which the medium and long-term debt has continued to rise, unlike the dropping short-term debt.

The balance of services has registered a surplus of EUR 110 M in January-April 2009, the surplus being 2.2 times smaller than the one registered in the same period last year when it totaled EUR 242 M, the BNR data shows. Compared to the same period last year, the foreign direct investments (FDI) have dropped by 44.4 per cent to EUR 2.055 bln, surpassing by almost two times the current account deficit, the same BNR data shows. The FDI situation has grown worse compared to the start of this year. In the first four months of 2008 the FDI stood at EUR 3.695 bln, a level that covered only 66 per cent of the current account deficit at that time. Of the FDI registered in the first four months of 2009, the capital participations represented 51 per cent, the reinvested profits 8.8 per cent and the intra-group credits the remaining 40 per cent, according to BNR.

Smaller remittances

The current transfers’ inflows, which mainly include the remittances of Romanian workers abroad, have dropped by 12.65 per cent to EUR 2.423 bln in the January-April 2009 period, down from the EUR 2.774 bln level registered in the first four months of 2008. In March the remittances dropped by 7.42 per cent to EUR 1.92 bln. Thus, in April, the inflows totaled EUR 502 M. On the other hand, outflows have dropped by 16.71 per cent from EUR 1.071 bln in the January-April 2008 period to EUR 892 M in the first four months of this year.

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