Page 64 - bne IntelliNews SE Outlook Regions 2024

The outlook remains, however, challenging for Romania’s exports and trade deficit given the economic slowdown in its main commercial partners and the local producers’ proven weak ability to substitute imported goods.
Domestic demand remains robust, driven by the Resilience Facility inflows and the tight labour market keeping the employees’ incomes steady in real terms.
Imports will rise faster than exports in 2024, according to the government’s forecast, and at a similar rate to exports in the years to come. The CA deficit to GDP ratio is expected to narrow, but not as an effect of improvements in the trade with goods.
Romania’s external debt increased by 15% y/y to €161.3bn at the end of September 2023, according to data published by the National Bank of Romania (BNR).
The debt-to-GDP ratio, however, decreased to 52.8%, from 53.7% in September 2022 and 58.0% in September 2021. The decrease of the country’s indebtedness metric, despite the notable advance in the nominal external debt, was possible thanks to the leap marked by the nominal GDP (+17.3% y/y for the 12-month GDP as of June 2023 (latest data available).
Out of the total external debt, the government’s debt was €73.3bn at the end of September 2023, 32% up y/y. The government’s external debt thus surged by nearly €18bn in just one year. As a ratio to GDP, the public debt rose to 24% as of September 2023, up from 21.3% one year earlier.
All the other non-government entities thus reduced their external debt when expressed as a ratio to GDP, from 31.9% to 28.8%. This was possible mainly because the FDI companies reduced their borrowing from parent groups after the COVID-19 crisis and the cash constraints dissipated.
64 SE Outlook 2024 www.intellinews.com