Romania’s current account (CA) deficit has narrowed marginally (-1.2% y\/y) to EUR 2.66 billion in August 2025, bringing the CA gap in 12 months to August to EUR 29.6 billion (+17% y\/y), or 8.1% of GDP, according to data published by the National Bank.<\/p>\n
The CA gap to GDP ratio thus eased slightly from 8.2% in July, after it neared 9% in May, remaining well above the 7.5% ratio as of August 2024.<\/p>\n
The CA gap’s moderate compression over the past couple of months, which occurred amid chronic deterioration of Romania’s external position (CA gap was only 5.1% of GDP in 2020), is consistent with smaller trade deficits prompted by the beginning of the expected slowdown in domestic demand, particularly on the consumption side.\u00a0<\/p>\n
Thus, the trade gap (goods and services) in the 12 months to August accounted for EUR 21.6 billion (+12% y\/y) \u2013 after a gradual decline from almost EUR 23 billion in April. The compression is marginal, but combined with a nominal increase of GDP, it resulted in a significant improvement of the country’s external deficit (revealed by the 0.8 pp improvement in the CA-to-GD ratio over a period of only three months.<\/p>\n
On the downside, the inflow of foreign direct investments (FDI) in Romania is also losing momentum to under EUR 6.1 billion in 12 months to August (-8% y\/y) in gross terms from EUR 6.9 billion in 12 months to June.<\/p>\n
Net FDI to Romania contracted by 12% y\/y to EUR 5.5 billion in 12 months to August. Out of this, only EUR 2.3 billion (still a significant 55% up y\/y) was new equity with EUR 1.8 billion in reinvested earnings (out of a total of EUR 10 billion earnings generated by FDI companies in Romania, -13.7% y\/y) and EUR 1.4 billion net borrowing by local FDI companies from foreign groups.\u00a0<\/p>\n
Notably, the share of reinvested earnings as a part of total earnings derived by FDI companies in Romania dropped to 18% in 12 months to August, from 34% one year earlier.<\/p>\n