Current Account deficit in Romania Amounted EUR 11.8 Billion at the End of the First 9 Months

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Current Account deficit in Romania Amounted EUR 11.8 Billion at the End of the First 9 Months

The current account deficit in Romania amounted to EUR 11.8 billion at the end of the first 9 months of 2007, up 76.5 percent year-on-year.

The deficit's ratio in Gross Domestic Product (GDP) was 10.46 percent, estimated by the National Prognosis Commission (CNP) to be EUR 112.8 bln, Business Standard daily reports.

However, the September deficit narrowed compared to that in August, when it was 87.1 percent higher year-on-year. The trade balance deficit widened 67 percent year-on-year during the January-September period, up to €12.26 bln, according to National Bank (BNR).

 

Economic analysts foresee a total 14 percent ratio of the current account deficit in GDP by the end of the year, but say that a correction is possible, through restrictive economic policies or a hard landing of the exchange rate, although this would dim hopes on maintaining the inflation target.

According to a Danske Bank analysis, Romania faces a serious lack of balance due to a non-sustainable economic growth pace which could lead to economic overheating.

Romania and other countries in the regions, such as Bulgaria, Lithuania, Latvia, and Estonia, "risk a forced landing of the economy" that could lead to a "financial deadlock," say Danske Bank analysts.

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