Romania’s trade deficit widens in Q1 2021, according to data from the National Institute for Statistics. The gap between Romanian exports and imports reached EUR 5.327 billion. This figure is EUR 863.1 million higher than the one registered in Q1 2020.
According to the official sources, the exports of the Romanian goods and services reached EUR 17.719 billion in value, while the imports reached EUR 23.046 billion.
The good news, if we can talk about good news with this level of the current deficit, is that the exports increased in value as well, with 3.9% y/y. At the same time, the imports grew by 7.1% y/y.
The trade balance deficit issue is not new for Romania. For years now, the country has been widening its trade deficit by importing more than it exports. The smallest gap in the most recent 10 years was met in 2013, when Romania had a trade deficit of only USD 7.65 billion. After that, the yearly trade deficit of the country kept on widening, reaching USD 21.402 billion.
By interpreting the Q1 data, it is clear that Romania will have a huge deficit in 2021 as well, and the situation doesn’t look like improving.
The paradox of Romania’s trade balance deficit is that it is registered for food. Romania is one of the biggest cereal grain exporters worldwide. Meanwhile, it also imports millions of tons of processed food, which creates a deficit of more than EUR 4 billion only for the food trade balance. Yes, 2020 brought a drop in the Romanian grain exports because of the drought, but still, the situation exists for years.
A solution would be to export more, by investing in agriculture and by helping the producers properly deposit and process the food and thus add value to their crops. This has to come as a governmental strategy, on a long term, but Romania doesn’t seem to think that far.
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