Wednesday, September 9, 2009

Romania Jan-July trade deficit shrinks 63 pct y/y

BUCHAREST, Sept 9 (Reuters) - Romania's trade deficit shrank by 63 percent on the year to 4.9 billion euros ($7.11 billion) in January-July as imports dived faster than exports, boosting expectations of deep economic contraction in the third quarter.

Romania's vast trade gap last year put it among the most vulnerable states in eastern Europe in terms of financing risks and forced it to secure 20 billion euros in an IMF-led aid in March. But the gap is narrowing sharply this year as the world economic crisis cuts demand.Data from the National Statistics Board (INS) showed on Wednesday that July's trade deficit was 487 million euros.

The INS said CIF (cost/insurance/freight) imports dropped 36.6 percent year-on-year to 21.2 billion euros, while exports fell 19.4 percent to 16.3 billion euros.Wednesday figures gave no breakdown on type of imports.

Analysts said the fall was in line with market expectations, signalling a sharp drop in demand.'The July figures are not a surprise, the trade shortfall is falling continuously ... For the third quarter we estimate an economic contraction of 9.1 percent,' said Rozalia Pal of UniCredit Tiriac Bank.

Revised GDP figures on Tuesday showed the economy collapsing by 8.7 percent on the year in the second quarter, versus a preliminary estimate of 8.8 percent and 6.2 percent in the first three months of the year.The International Monetary Fund sees Romanian economy contracting by 8-8.5 percent this year.

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