ROMANIA'S EXPORTS AND IMPORTS ACCELERATE IN MARCH TO NEW RECORD HIGHS
Romania’s exports reached EUR 5.71 billion in March 2017, a new all-time high, after a 15.9% increase versus the same month of 2016. The imports also set a new record, reaching EUR 6,77 billion in March, up 14.8% year-on-year. The trade deficit thus reached EUR 1.06 billion, up from EUR 965 million in March 2016, according to data from the National Statistics Institute (INS).
The export increase was supported by the higher demand in the Eurozone and the local currency depreciation. Thus, the intra-EU exports went up by 16.4% in the first quarter, to EUR 4.4 billion, Banca Transilvania analysts point out. Meanwhile, the import growth mainly came from outside the EU, this component increasing by 19.6%, to EUR 1.6 billion in March.
In the first three months of this year, Romania’s imports outpaced the exports growing at a rate of 12.4% versus the first quarter of 2016, to EUR 17.78 billion. Meanwhile, the exports increased by 11.5%, to EUR 15.46 billion. The commercial deficit widened to EUR 2.32 billion, from under EUR 2 billion in Q1 2016.
“On the imports side, the higher commodity prices are partly responsible for the acceleration in Q1 2017, but so is the increased private consumption, leading to better domestic demand for manufactured goods (including vehicles),” reads an ING note.
The cumulated trade deficit in the 12 months ended March 31 reached 6.2% of the GDP, the widest level in nearly four years, according to ING analysts. However, the all-time low for this gap was reached back in the first quarter of 2018, when it stood at a whopping 19.1% of GDP. “It is safe to say that at the current juncture, the external trade situation still looks fairly good, despite the deficit deteriorating a bit versus 2014 levels,” according to ING.
“Imports should remain robust this year, though external demand should also not fall behind too much if the current favorable trends in the Eurozone hold. All in all, the goods trade deficit might widen a bit more this year, but should remain well off the unsustainable levels seen in the pre-crisis period and should be almost entirely offset by the surplus on the services side,” the ING analysts concluded.
Banca Transilvania analysts estimate that the export growth will accelerate this year to 8.7% from 8.3% in 2016 while the yearly increase in imports will slightly decline from 9.8% to 9.2%.