Romania: Living On Credit

In January 2024, the balance-of-payments current account posted a deficit of EUR 1,358 million, compared with EUR 760 million in January 2023. The breakdown shows that the deficit on trade in goods declined by EUR 229 million, the surplus on services fell by EUR 351 million, the primary income deficit stood at EUR 376 million against a EUR 27 million surplus in the same year-ago period, while the secondary income surplus decreased by EUR 72 million, National Bank of Romania communicates.

Non-residents’ direct investment in Romania totalled EUR 583 million (compared with EUR 596 million in January 2023), of which equity (including the estimated net reinvestment of earnings) and intercompany lending recorded net values of EUR 697 million and EUR -114 million, respectively.

In January 2024, total external debt increased by EUR 4,314 million to EUR 173,126 million, of which:

• long-term external debt in end-January 2024 ran at EUR 125,244 million (72.3 percent of total external debt), up 3.4 percent against end-2023;
• short-term external debt at end-January 2024 amounted to EUR 47,882 million (27.7 percent of total external debt), up 0.5 percent from end-2023.

The long-term external debt service ratio stood at 11.2 percent in January 2024, compared to 17.4 percent in 2023. At the end of January 2024, goods and services import cover ran at 6.3 months, compared to 5.6 months at the end of 2023.

At the end of January 2024, the National Bank of Romania’s foreign exchange reserves ratio to short-term external debt by remaining maturity was 99.9 percent, as against 97.4 percent at the end of 2023.