Wednesday, August 12, 2009

Romania C/A deficit shrinks 73.3 pct y/y in Jan-June

BUCHAREST, Aug 12 (Reuters) - Romania's current account deficit shrank 73.3 percent year-on-year to 2.38 billion euros ($3.36 billion) in the first half of the year, the central bank said on Wednesday. The external shortfall has been a headache for Romania and was one of the main causes of the leu currency's weakness at the start of 2009, making the country more vulnerable to the global cash squeeze and prompting it to seek IMF help.

But the gap is now narrowing sharply as the world economic crisis hits consumption and manufacturing, raising concerns that it may be adjusting too fast. Preliminary GDP data for the second quarter is due out on Thursday, but Finance Minister Gheorghe Pogea has said the economy had likely contracted by more than 8 percent on the year, compared with a 6.2 percent contraction in January-March. The International Monetary Fund now sees the external shortfall at 5.5 percent of gross domestic product this year, compared to a previous 7.5 percent estimate.

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