Trade balance deficit on a downward trend

Romania's trade deficit has decreased in the first seven months of the year.

Bogdan Matei, 12.09.2023, 14:00

Traditionally an importer, post-communist Romanias economy buys more than it sells, and the trade balance deficit is a chronic issue. The first seven months of 2023 promise, however, slight corrections. In this interval, the deficit stood at 15.6 billion Euros, 17% lower than the same period last year, show data published by the National Institute of Statistics. Romanias exports totaled 55 billion Euros, 4.6% higher than in the same period of the previous year. At the same time, between January 1 and July 31, 2023, Romania imported goods worth 70 billion Euros, down by 1.1% as compared to the similar period of 2022. Important shares in the structure of commercial exchanges are held by cars and transport equipment (44.8% for export and 36.3% for import) and by other manufactured products (30.3% for export and 29.2% for import).

The Romanian economy remains strongly anchored in the trade flows of the European Union. The value of intra-EU27 goods exchanges in the first seven months of 2023 was over 40 billion Euros for exports and 52 billion for imports, accounting for 72.8% of the total exports and 73.6% of the total imports. The value of extra-EU27 exchanges was almost 15 billion Euros for exports and over 18 billion for imports, accounting for 27.2% of the total exports and 26.4% of the total imports. A few days ago, the Fitch rating agency reconfirmed Romanias sovereign rating at BBB minus, with a stable outlook. The decision is supported by capital flows from the European Union, which support investments and the country’s macroeconomic stability, as well as by the positive evolution of the GDP per capita and indicators of governance and human development, which are at higher levels as compared with other countries from the same rating group. According to Fitch, the Romanian economy will register a 2.9% growth this year and 3.2% next year.

The Finance Minister, Marcel Boloş, wrote on his Facebook page that the Fitch Agencys decision to reconfirm Romanias sovereign rating is a strong signal that the country is on the right track and is regarded with confidence by international investors. Experts argue, however, that Romanias rating could be improved, if the authorities manage to reduce the budget deficit and the public debt in the medium term. The international economic press writes that Romania now wants to raise approximately three billion Euros from the international markets, through the third sale of bonds this year. The Romanian government exceeds its loan target, in the context in which, it will most likely need more funds to finance a larger budget deficit, the foreign experts conclude. (LS)