Thursday, December 11, 2008

Romania Jan-Oct trade deficit up 11.2 pct y/y

BUCHAREST, Dec 10 (Reuters) - Romania's January-October foreign trade deficit widened by 11.2 percent on the year to 19.2 billion euros ($24.7 billion).

Data from the National Statistics Board (INS) on Wednesday showed CIF (cost/insurance/freight) imports rose 15.5 percent year-on-year to 48.2 billion euros, while exports were up 18.6 percent to 29 billion euros.

The October gap was down 9 percent year-on-year at 2 billion euros.
Romania's external deficit, boosted by a vast trade gap is its main economic headache, sparking talk of risks to economic stability in the wake of the global financial crisis.

But analysts said the 10-month trade data boosted expectations the current account deficit growth might stay below last year's level of 14 percent of GDP, chiefly because of a weaker leu currency and improved structure of exports.

In percentage terms, exports exceeded import growth over the first 10 months of the year, a trend in place since the end of last year.

"Data offer a good sign, showing an improvement in the external gap. I see it reaching some 13.9 percent at the end of the year," said Ionut Dumitru, head of research at Raiffeisen Bank in Bucharest.

The Romanian leu was quoted slightly below Tuesday's one-month low of 3.90 against the euro in early trade on Wednesday, driven by commercial orders from retailers and political uncertainty.

Coalition talks after Romania's inconclusive parliamentary election were set to continue on Wednesday, with the leftist Social Democrats and centrist Democrat-Liberals yet to agree on some policies and whether to include a small ethnic Hungarian party in the mix.

At 0810 GMT, the leu traded at 3.8870 per euro, compared with Tuesday's close of 3.8798.

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