Romania's current account deficit shrank by 73.8% in the first seven months, to 2.71 billion euros. Foreign investment dropped by 48%

Romania’s current account deficit balance sheet shows a drop of 73.8% in the first seven months of the year, against the same 2008 period. It currently amounts to 2.71 billion euros, according to Romania’s Central Bank (BNR). The trend is a strong decrease: after the first semester, the current account deficit had already recorded a 73.3%.

The impact leading to the current account deficit was made by the deficit of the commercial balance, which amounted to 3.23 billion euros, dropping 69.4% against January-July 2008.

The deficit for the income balance in the period mentioned was 1.68 billion euros, namely -48.7% compared with the first seven months in 2008. At the same time, the balance for goods and services recorded a 3.27 billion euros deficit, 10.17 billion euros less against the same 2008 period.

The current transfers sold dropped to 2.24 billion euros that is a 27.2% drop against January – July 2008. The most significant contribution to the transfers was made by the money sent in the country by the Romanians working overseas.

Direct foreign investment dropped 48%

The foreign investment in Romania amounted to 3.09 billion euros in the mentioned period, in contrast with 5.94 billion euros recorded in the same 2008 time line. The current account deficit was completely covered by direct straight investment. Of the total investments, 48.6% represented the loans given by the mother-companies to their Romanian subsidiaries.

The medium and long-term foreign debt recorded 59.75 billion euros at the end of July, up 16.7% against the end of last year. At the same time, the short-term foreign debt was 17.01 billion euros, namely 22.2% of the total foreign debt, 23.3% less than the figure recoded in December 31 2008.