In First Four Months, Romania"s Trade Deficit Down 60.6%

Andreea ArĂboaei

Romania"s exports declined by 23% in April compared to the corresponding month of 2008, while imports dropped 40%, thus leading to a trade deficit of 835.1 million EUR, according to the National Statistics Institute (INS). Converted to the national currency, the deficit decreased by 55.77% in the reporting period to 3.53 billion RON, declining for the seventh consecutive month.

According to Mihai Ionescu, President of the National Association of Exporters and Importers in Romania (ANEIR), preliminary data for May indicate a 47.3% decrease in exports and a 44.2% decrease in imports. "The continuing decline of foreign trade is even worse considering that we are no longer reporting an increase compared to the previous month, but a decrease compared to the final months of 2008, when the trade in goods and services was already lower than in 2007, but higher than in the previous months," he said.

In his opinion, the volume of exports is usually the first indicator of a crisis, but also the first indicator of recovery after recession. In the current context, the absence of any upturn of this indicator means that the climax of the crisis is still in the future. "We expect that exports will decline by 25-30% in the first half of the year. For the second half, we continue to hope that the decline will be about 20-25%," Ionescu said, relying his forecasts on the condition that the Government is going to implement belated crisis containment measures such as the capitalization of CEC Bank and Eximbank and the offset between debts to the State and receivables from the State.

Imports declined to approximately 2.97 billion EUR in April, while exports plunged to almost 2.14 billion EUR, the National Statistics Institute announced. Imports from non-EU countries decreased by 40.8% from the corresponding month of 2008, reaching 834.7 million EUR from 1.41 billion EUR. Imports from EU countries decreased by nearly 40% to almost 2.14 billion EUR. In turn, Romania secured over 580 million EUR worth of exports to non-EU countries, down by 31% from April 2008, and 1.56 billion EUR worth of exports to EU countries, down by 19.4%.

The trade deficit for the first four months decreased by 60.68% to 2.86 billion EUR (12.13 billion RON), according to the National Statistics Institute, amid a 36.4% drop in imports and a 20.3% drop in exports compared to the corresponding period of 2008. Imports made in the first four months of the year amounted to 11.56 billion EUR, while exports reached 8.7 billion EUR.

Exports made to EU countries in the reporting period amounted to 6.48 billion EUR, down by 16% year-on-year, while imports from EU countries dropped by 34.4% to 8.47 billion EUR. Exports to non-EU countries dropped 30.6% to 2.22 billion EUR, while imports from non-EU countries plunged by 41.4% to 3.09 billion EUR.

Automobiles and various transportation vehicles amounted to 40.8% of Romania"s exports, followed by fuel with 6.4%, food, beverages and tobacco with 5.8%, raw materials with 5.6% and chemical products with 4.2%. Other manufactured products accounted for 37.2% of the exports.

Imports were also dominated by automobiles and transportation vehicles with 35.2%, followed by chemical products with 14.8%, food, beverages and tobacco with 9.5%, fuel with 8.4% and raw materials with 2.7%. Other manufactured products amounted to 31.1% of the imports.

The National Statistics Institute explained the difference between the trends projected on RON-denominated values and, respectively, on EUR-denominated values by the depreciation of the national currency between January and April 2009 by 14.6% to 17.3% compared to the corresponding months of 2008.