Thursday, November 13, 2008

Romania C/A deficit widens 14.8 pct y/y in Jan-Sept

BUCHAREST, Nov 12 (Reuters) - Romania's current account deficit widened by 14.8 percent on the year to 12.7 billion euros ($16 billion) in January-September, central bank data showed on Wednesday.

A year earlier, the deficit had expanded by roughly 65 percent on an annual basis in the first nine months after Romania's European Union accession in 2007 removed customs taxes with member states and boosted imports.

The external shortfall is a major headache for the consumption-driven economy, exposing the currency to the risk of a steep depreciation if foreign funds were to dry up.

The bank said the external shortfall was 57 percent covered by foreign direct investment, which reached 7.2 billion euros at the end of September.

The gap reached a cumulative 16.9 billion euros at the end of 2007, or around 14 percent of gross domestic product.

Statistical data showed earlier this week that Romania's January-September foreign trade deficit in CIF prices widened 12.5 percent to 17 billion euros, as exports exceeded import growth, keeping a trend recorded since last December.

Analysts have said trade balance data boosted hopes the current account gap might stabilise at last year's level of 14 percent of GDP or even below it, helped by improved exports structure and a weak leu currency.

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