BNR: Balance of payments deficit of EUR 3.954 bn – in 10 months

In January-October 2009, the balance-of-payments current account posted a deficit of EUR 3,954 bn, 72.2 percent lower than in the same period of 2008, Romania’s National Bank (BNR) informs in a press release. The main influence upon the reduction of the current account balance was played by a shrinking trade deficit, amounting at EUR 5.414 bn, a reduction of 66.9 percent from the period Jan. – Oct. 2008

The current account deficit in the period Jan. through Oct. 2009 was financed in a proportion of 94.1 percent through direct investments of non-residents in Romania, in the amount of EUR 3.720 bn (compared to EUR 7.667 bn in the period Jan. – Oct. 2008), of which participations to the share capital (including the re-invested profit) amounted at EUR 1.946 bn (compared to EUR 4.480 bn), and the intra-group loans EUR 1.774 bn (compared to EUR 3.187 bn).

Medium and long-term external debt stood on Oct. 31, 2009 at the level of EUR 62.904 bn (80.7 percent of the total external debt), up 22.3 percent from Dec. 31, 2008 and the short term one reached on Oct. 31, 2009 the level of EUR 14.996 bn (19.3 percent of the total external debt), a drop of 27.2 percent from Dec. 31, 2008.

According to BNR, medium and long-term external debt service ratio ran at 27.9 percent in the first ten months of 2009, compared to 31.5 percent in 2008. At end-October 2009, goods and services import cover stood at 8.7 months versus 5.6 months at year-end 2008. The service balance reported a deficit of EUR 234 M in the first ten months, versus a EUR 414 M surplus in the similar period of 2008, BNR also shows. The main cause of the gap in the service balance was the EUR 181 M deficit recorded on the “other services” segment, from a EUR 617 M surplus in the first ten months of 2008. Cash inflows from current transfers, including remittances from Romanians abroad, dropped 26.2 percent in the first ten months to EUR 5.48 bn. Cash outflows in the similar period decreased from EUR 2.37 bn to EUR 2.016 bn. Last year, Romania’s balance of payments broke its advance to 1.2 percent, reaching EUR 16.877 bn, after widening more than 60 percent in 2007. The external deficit shrank in 2008 to 12.3 percent of the gross domestic product (GDP), from 13.5 percent in the previous year.

EU27 current account deficit EUR 33.3 bln

The EU 27 (Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom) external current account recorded a deficit of EUR 33.3 bn in the third quarter of 2009, compared with a deficit of EUR 72.6 bn in the third quarter of 2008 and a deficit of EUR 49.2 bn in the second quarter of 2009. In the third quarter of 2009, the EU27 external balance of trade in services recorded a surplus of EUR 14.2 bn, compared with a surplus of EUR 20.1 bn in the third quarter of 2008 and a surplus of EUR 17.5 bn in the second quarter of 2009.

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