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Romania Trade Gap Widens

Romania Trade Gap WidensRomania Trade Gap Widens

Romania’s exports of goods increased by 15.9% year-on-year in January to €5.42 billion ($6.66 billion), but were outpaced by imports, government data showed on Monday, Business Review reported. According to National Institute of Statistics, imports rose 17.3% in January to 6.2 billion, and the trade deficit widened 28% to €775 million. Romania’s trade gap surged 30% in 2017 to €12.96 billion, as the government adopted during the last few years a strategy of wage-led growth, stimulating household consumption and GDP growth rates. But this model has generated larger fiscal and current account deficits and experts insist Romania should change the economic model in order to obtain real long-term economic and social development. In the absence of structural reforms and fiscal consolidation, Romania’s buoyant economic growth risks setting the stage for a hard landing, the European Commission wrote at the beginning of its country report on Romania. The country’s economic boom has been driven mainly by consumption, while investment has remained subdued, according to the EC.

 

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