Romania’s current account (CA) deficit in rolling 12 months has narrowed for the second consecutive month to EUR 32.12 billion in July, according to the data published by the National Bank of Romania (BNR). The 12-month rolling CA gap has thus narrowed by EUR 0.5 billion from June, after it previously contracted by EUR 1.4 billion in May when it leaked at EUR 34.1 billion.
The external deficit in 12 months to July is still 28% above the gap in the previous 12 months.
The deficit-to-GDP ratio has improved to 8.8% in July, from 8.9% in June and 9.5% in May. It is, however, still 1.4 percentage points compared to July 2024.
The trade in goods is the main driver for the CA gap, with a deficit of EUR 34.9 billion in the 12 months to July. It also contributed to the leap marked over the past 12 months, since it widened by EUR 3.8 billion (+12% y/y) – just over half of the total EUR 7.1 billion advance of the CA deficit.
The trade in services, with a EUR 11.7 billion surplus in 12 months to July, dragged down the overall trade deficit, but it has apparently reached its limitations as its surplus has edged down by 3% y/y.
Another key element of Romania’s CA balance is the net outflows of primary incomes (official wage remittances, interest, and dividends generated by foreign investments): EUR 9.5 billion (+9% y/y).
The foreign direct investments, EUR 6.75 billion (+8% y/y) in the 12 months to July, accounted for only 1.9% of GDP and less than a quarter of the CA balance. Out of the total FDI, roughly half (EUR 3.2 billion, -20% y/y) was reinvested profits, while the new equity investments accounted for only 14% (EUR 925 million, -40% y/y) and the net loans to local subsidiaries accounted for EUR 2.3 billion (+386% y/y).
Net borrowing, particularly by the state, contributed more significantly to the financing of the CA deficit: Romania’s long-term gross external debt has increased by some EUR 25.1 billion over the past 12 months to over EUR 220 billion at the end of July 2025, out of which the state’s long-term debt increased by EUR 18.7 billion.
iulian@romania-insider.com
(Photo source: Ruletkka/Dreamstime.com)
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