“About 30% of the goods are carried on domestic routes and 70% on international routes. We have the highest volume of commodities imports in Europe. Everyone imports, from food and home appliances to finished wood products such as furniture,” Romeo Dunca says.
“As a country we are consumers, we no longer make anything, we export wood and import a lot of wood products, finished products, instead of the other way round. We are headed in the wrong direction, I see no improvement, those who are still trying to make something are overwhelmed.”
Indeed, data show the current account deficit rose by 52% to almost EUR8 billion in the first ten months of year compared with the year-ago period. It will come close to 4% of GDP this year, which can put pressure on the exchange rate, which is stable for now at less than 4.7 lei to one euro, though with a lot of effort on the part of Romania’s central bank.
The deficit of the current account of the balance of payments is due to the severe deterioration by 22% of the trade deficit, from EUR9.5 billion in the first ten months of 2017 to EUR11.5 billion in 2018. Services exports still sees a surplus but dropped slightly from EUR6.9 billion in the first ten months of 2017 to EUR6.7 billion. Market data show sales continue to increase, driven by wage raises, 14% in October 2018 to October 2017. Retail sales, the best indicator of the trend of consumer spending, went up 5.4% in January-October, while last year it went up 8%. Most of this high consumer spending is fueled by imports, according to statistics.
(English version by Loredana Fratila-Cristescu)