Page 63 - SE Outlook Regions 2024

The FDI-to-current account gap coverage ratio deteriorated consequently, although the CA gap has also narrowed significantly to 6.9% of GDP in the 12 months to September.
On the upside, the gross flow of new equity to Romania increased impressively to €2.25bn in the 12 months to September, from €515mn in the previous 12-month period. The new equity accounted for 37% of total gross equity over the past 12 months, a ratio not seen since January 2021.
Another notable development is that the FDI companies are returning their loans to parent financial groups: €858mn in 12 months to September, compared to €3bn borrowed over the previous 12-month period.
Romania’s foreign trade gap has narrowed to the pre-war level of 9.2% of GDP.
Romania’s trade deficit for goods contracted by 12.2% y/y to €28.9bn (9.2% of GDP) in the 12 months to October 2023, as imports edged down by 0.5% y/y to €122.7bn and exports advanced by 3.7% y/y to €93.8bn (30% of GDP).
The country’s deficit-to-GDP ratio peaked at 11.8-11.9% from October 2022 to January 2023, when the prices of oil and gas rose amid high uncertainty caused by the war in Ukraine and the availability of resources. Both exports and imports were inflated by the high commodity prices during that period.
At 9.2% of GDP in the 12 months to October 2023, Romania’s trade deficit (goods) returned to the level of August 2021.
The export-to-GDP ratio edged down marginally to 29.8% in the 12 months to October 2023 from 30.5% in August 2021.
This might not seem to be a notable performance – but it is, given the real strengthening of the local currency over the period since 2021. The export-to-GDP ratio, calculated on a rolling 12-month basis, exceeded 34% in January 2023 – but this was a transitory effect of high commodity and intermediary goods prices.
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