Romania\u2019s trade deficit with goods increased by 29% y\/y to EUR 2.95 billion in July, as the exports\u2019 modest improvement (+8.6% y\/y) was offset by the robust increase (+13.4% y\/y) in imports, according to the statistics office INS.<\/p>\n
It could be concluded that the robust demand for private consumption, driven by higher wages, drove the imports and the trade gap \u2013 but it would be short-sighted. In fact, the 12% y\/y nominal advance in consumption in 12 months to June (latest data available) failed to push up the imports that contracted by 1.5% y\/y.\u00a0<\/p>\n
In volume terms, the 4.4% y\/y advance in consumption (+4.5% y\/y for households) pushed up the imports (goods) by only 0.5% y\/y. The import of services increased by 1.0% y\/y. But the GDP rose three times faster than the import of goods, by 1.9% y\/y.<\/p>\n
From a slightly broader perspective, Romania\u2019s exports and imports (hence the trade gap) expressed in nominal (euro and local currency) terms have actually featured no particular trend for the past two years.\u00a0<\/p>\n
Exports, imports, and trade have stagnated nominally.\u00a0<\/p>\n
High annual growth rates, such as the deficit\u2019s sharp advance in July ( or Q2), reflect certain volatility but not necessarily real trends.\u00a0<\/p>\n
In comparative terms, as a share of the total economy (GDP), both exports and imports (and the deficit) shrunk.<\/p>\n
The exports in 12 months to July contracted by 1.9% y\/y to EUR 92.6 billion, imports edged down by 1.0% y\/y to EUR 124.0 billion, and the trade gap increased marginally by 1.5% y\/y to EUR 31.4 billion.\u00a0<\/p>\n
In the meantime, for the same period of time, the GDP increased by 11.3% y\/y (as of June 2024, the latest data available), diluting Romania\u2019s foreign trade figures \u2013 including the deficit.<\/p>\n