Romania’s trade deficit (goods only) widened by nearly 33% y/y in April-May, as exports contracted by 2.1% y/y while imports increased by 5.3% y/y, according to data published by the statistics office INS.

The short-term dynamics reflect the industry’s modest performance and the robust private consumption (retail sales), while from a broader perspective, the country’s external balance is slightly improving after the energy (natural gas, crude oil) price shock in 2022/2023 while remaining deep in the deficit area.

While the exports’ modest performance is not something new (-3.4% y/y in Q1) and is in line with the modest performance of industry across the whole of Europe, the imports gain momentum from -3.2% y/y in Q1 as the private consumption remains robust as the non-food sales grew by double-digit annual rates (volume terms) in both Q1 and April-May period.

On a broader perspective, the exports in the twelve months to May decreased by 2.9% y/y to EUR 91.95 billion, while the imports contracted by 3.9% y/y to EUR 122.13 billion.

The trade deficit thus narrowed slightly by 6.8% y/y to EUR 30.2 billion, which, in the general (although diminishing) inflationary context, indicates certain improvement in the country’s external position that remains deep in the deficit area. 

The trade gap (goods) to GDP ratio thus eased to 9.1% in the twelve months to May 2024, down from 11% calculated a year earlier.

iulian@romania-insider.com

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