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Tuesday, February 22, 2005

Current account deficit: 7.6% of GDP in 2004, foreign debt: 12% and an estimated economic growth of 8.3% for Romania in 2004.

According to the European Pre-Accession Program for 2004, which the government sent last Friday to Brussels, the current account deficit was 7.6% of the Gross Domestic Product (GDP).

The worrying result was chiefly fueled by the trade deficit, which surged to 5.53 billion euros, or up 42.2% in 2004 compared to the previous year.

Furthermore, the revenue deficit increased from 1.19 billion euros to 1.36 billion euros.

The surge in current transfers, representing money Romanian citizens working abroad send into the country, from a little over 2 billion euros in 2003 to about 2.5 billion euros last year, managed to partially compensate the negative trends reported in the other sectors forming the trade balance.

This year, Romanian authorities negotiated a deficit narrowing to 6.8-7% of GDP with the International Monetary Fund.

Romania's average and long-term foreign debt increased by 11.9% last year, up to 17.5 billion euros, as state-warranted debts for the public sector boomed, coupled with an increase in credits for the private sector.

According to National Bank of Romania data, the country's foreign debts dropped from 6.5% billion euros in 2004 to 6.4 billion euros at the end of last year, as Romania paid back 825 million euros.

In return, state-warranted credits surged from 3.2 billion euros to 3.7 billion euros at the end of last year. The private sector filed for loans amounting to 7.2 billion euros in 2004, up from prior results indicating 5.6 billion euros.

BNR Governor Mugur Isarescu recently stated the national bank is estimating an economic growth pace of 8.3% for Romania in 2004.

Posted by Iulia Rasoiu : 2/22/2005 09:35:00 am