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2.9.2 External environment

Romania’s current account (CA) deficit surged by 58.5% y/y to €26.2bn
in the 12 months to October. The 12-month CA deficit thus hit 9.5% of
the annual GDP calculated based on the latest available data, of
end-September, compared to 7.0% calculated on the same base in
October 2021.

Romania’s economy features a structural external deficit aggravated in
recent years by the high energy prices and by the inflow of funds from
the EU budget that push up domestic demand but (at least so far, or
insufficiently) not the domestic supply. This is likely to continue in the
short term, but it is important that productive investments address the
structural external deficit.

The 12-month trade deficit with (net import of) goods surged by 39% y/y
to €31.2bn at the end of October, remaining the main driver of
Romania’s external deficit.

However, the outflows generated by foreign direct investments (FDI)
rose as well, by 36% y/y to €11.2bn over the 12-month period –
reaching a size that is comparable with the surplus generated by
Romania’s net export of services (€11.8bn in the rolling 12-month
period, +29% y/y). Some of the outflows generated by FDI are,
however, reinvested and counted as new FDI.

As regards foreign direct investments in Romania, they dropped further
to €9.4bn in 12 months to October.

When it comes to equity investments (as opposed to reinvested
earnings or intra-group loans), Romania turned for the first time in the
past decades into a net foreign investor (+€512mn in the 12-month
period), thanks to Romgaz taking over a €1bn stake in the Neptun
Deep perimeter from ExxonMobil in August.

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