Even Current Account Deficits In 2009 - 2010

The current account deficit in 2010 could approximately the same as in 2009, according to the National Bank of Romania (BNR) Vice Governor Cristian Popa. The BNR forecasts a current account deficit of 6.5-7% of the GDP for this year, in contrast with some opinions (Bank of America Securities - Merrill Lynch) that Romania"s current account deficit could be 5% of the GDP this year.

The payment balance plays a decisive role in the effort to reduce the current account deficit. The payment balance deficit decreased by 66.5% in January - April 2009 as imports plunged severely. "Similar decreases in imports have also occurred in other Central and Eastern European countries. I do not think that the decrease will advance faster in the future. More substantial reductions of the imports could already cause problems in the economy," Popa said.

• Saving picks up

Vice Governor Popa also pointed out that the risk existed to have an additional contraction of the GDP in 2009. "However, we maintain the (-)4% projection for the gross domestic product this year," he said. Vice Governor Popa explained that the Romanian economy was following the general trend of the region, doing even better than some of the neighbouring economies. "If we compare ourselves to other countries in Central and Eastern Europe, we find ourselves in a comfortable position in the middle tier, or even in the upper tier, we could say, if we speak about the performance of the economy. Poland is performing better than us. If we look at the industrial output, the exports or the imports, our percentages are similar...," he added.

"Two of our sectors have reported higher setbacks, however," the Vice Governor said, explaining that retail and construction were performing worse than the Central and Eastern Europe average. "I believe that the decrease in consumption has led to a major change in the behaviour of both households and enterprises. I can also see that people are more inclined towards savings. The market is more prudent," he explained.

Vice Governor Popa also warned that, although lending accounted for a fairly small part of the gross domestic product, an amount of pressure on repayment was becoming noticeable.