Wednesday, August 12, 2009
Romania’s First-Half Current-Account Deficit Narrows on Trade
By Adam Brown Aug. 12 (Bloomberg) -- Romania’s current-account deficit narrowed in the first half as a weaker leu and declining domestic purchasing power discouraged imports.
The gap narrowed to 2.38 billion euros ($3.36 billion) from 8.88 billion euros a year earlier, the Bucharest-based Banca Nationala a Romaniei said in an e-mail today. The government agreed in April to take a 20 billion-euro loan led by the International Monetary Fund to cover its current-account and budget shortfalls, joining other eastern European nations including Hungary, Ukraine, Belarus, Latvia and Serbia in seeking international aid.
The IMF predicted yesterday that the deficit of Romania’s current account, the widest measure of funds flowing in and out of the country, will narrow to 5.5 percent of gross domestic product this year from 12.5 percent last year. The leu has weakened about 15 percent against the euro in the past year, narrowing the trade gap. Imports dropped an annual 37 percent in the first half, while exports declined 20 percent, the National Statistics Institute said yesterday.
Lending growth, which boosted spending in the past three years, slowed to an annual 11.2 percent in June from 64 percent a year ago. Wage increases slowed to 8.3 percent from more than 20 percent at the same time, discouraging Romanians from buying imports. To contact the reporter on this story: Adam Brown in Bucharest at email@example.com;