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Balance of payments and external debt - February 2018

13.04.2018

In January - February 2018p, the balance-of-payments current account posted a deficit of EUR 172 million, compared with EUR 72 million in January – February 2017; the deficit on trade in goods widened by EUR 434 million, the surplus on services and that on secondary income narrowed by EUR 6 million and EUR 2 million respectively, while the primary income balance recorded a surplus of EUR 170 million, compared with a deficit of EUR 172 million.

Balance of payments current account (EUR million)
  January - February 2017p January - February 2018p
CREDIT DEBIT BALANCE CREDIT DEBIT BALANCE
CURRENT ACCOUNT (A+B+C) 13,302 13,374 -72 14,955 15,127 -172
A. Goods and services 11,845 11,806 39 13,275 13,676 -401
a. Goods 8,888 10,043 -1,155 9,920 11,509 -1,589
b. Services 2,957 1,763 1,194 3,355 2,167 1,188
- manufacturing services on physical inputs owned by others 443 33 410 456 31 425
- transport 867 351 516 1,003 427 576
- tourism-travel 313 396 -83 306 489 -183
- other 1,334 983 351 1,590 1,220 370
B. Primary income 1,084 1,256 -172 1,296 1,126 170
C. Secondary income 373 312 61 384 325 59

p - provisional data

Non-residents' direct investment in Romaniae totalled EUR 794 million (compared with EUR 820 million in January – February 2017), of which equity (including estimated net reinvestment of earnings) amounted to EUR 592 million and intercompany lending recorded a net value of EUR 202 million.

In January - February 2018, total external debt increased by EUR 1 558 million, of which:

  • long-term external debt at end-February 2018 stood at EUR 69,503 million (73.1 percent of total external debt), up 1.3 percent from end-2017;
  • short-term external debt at end-February 2018 amounted to EUR 25,532 million (26.9 percent of total external debt), up 2.7 percent against end-2017
Romania’s external debt and external debt service
  External debt External debt service, 2M 2018p
End-2017p End-February 2018p
I. Long-term external debt 68,613 69,503 1,794
I.1. Public debt 33,534 34,823 363
I.1.1. Direct public debt 33,102 34,405 352
I.1.2. Publicly guaranteed debt 432 418 11
I.2. Non-publicly guaranteed debt,
   of which: 		33,908 33,515 1,423
1.2.1. Long-term deposits of non-residents 2,597 2,343 529
I.3. Debt of the monetary authority,
   of which: 		1,171 1,165 8
I.3.1. Allocation of SDRs 1,171 1,165 8
II. Short-term external debt 24,864 25,532 9,357e
Total external debt (I+II) 93,477 95,035 11,151

e - estimates
p - provisional data

Long-term external debt service ratio ran at 13.5 percent in January - February 2018 against 23.9 percent in 2017. At end-February 2018, goods and services import cover stood at 5.7 months, as compared to 5.4 months at end-2017.

At end-February 2018, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 87 percent, against 87.2 percent at end-2017.

Methodological Notes

  1. Balance of payments data are updated on a monthly basis. Data for the current period together with the revised data for the base period are available under Data sets; historical monthly and quarterly data back to 2005 are available in the Interactive database.
  2. The international standard framework for statistics on the transactions and positions between an economy and the rest of the world lays down in the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6). The BPM6 methodology has been transposed into the EU legislation based on Commission Regulation (EU) No 555/2012 on Community statistics concerning balance of payments, international trade in services and foreign direct investment, as regards the update of data requirements and definitions.
  3. In order to analyse current account data, the following aspects should be considered:
    1. 3.1. Goods (on a BOP basis): Source: National Institute of Statistics (NIS) – International Trade of Goods. Imports FOB are calculated by the NBR based on the CIF/FOB conversion factor set by the NIS Coefficient CIF/FOB.pdf (romanian only). The balance of payments principle consists in entering goods based on the “change in economic ownership” criterion (goods acquired by residents are included, irrespective of whether the goods cross the country border or not), while in international trade statistics goods are recorded based on the “cross-border” criterion (goods are recorded when crossing the border, irrespective of whether they belong to residents or not). In order to ensure compliance with the “change in economic ownership” principle, the NIS data are adjusted by the NBR, so that the values of exports and imports of goods in the BOP statistics are different from those in international trade statistics. The main difference between the two types of statistics comes from manufacturing services on physical inputs owned by others which, according to BPM6, has been reclassified from Goods to Services and the data source has been changed from International Trade in Goods to the Quarterly Survey on international trade in services conducted by the NBR;
    2. 3.2. Services: Source: Quarterly Survey on International Trade in Services;
    3. 3.3. Primary income: includes compensation of employees, investment income (direct investment, portfolio investment, other investment) and other primary income (taxes, subsidies);
    4. 3.4. Secondary income: includes current private transfers and transfers of the general government.
  4. Foreign direct investment: The permanent debt between affiliated financial intermediaries (banks, NBFIs) is not treated as direct investment, but recorded under financial account/other investment.
  5. The balance of external public debt is cash-based (excluding unmatured accrued interest). External direct public debt includes external loans taken directly by the Ministry of Public Finance and local governments in compliance with the legislation on public debt, including the financial instruments acquired by non-residents – calculated at market value. External publicly guaranteed debt includes external loans guaranteed by the Ministry of Public Finance and local governments in compliance with the legislation on public debt. According to BPM6, the allocation of SDRs (item I.3.1 in the table) is included in the long-term external debt.
  6. Long-term external debt service ratio is calculated as a ratio of long-term external debt service to exports of goods and services.
  7. Import cover is calculated as a ratio of the international reserves (foreign exchange + gold) at the end of period to average monthly imports of goods and services for the period under review.
  8. Short-term external debt by remaining maturity refers to the short-term external debt outstanding at the end of period plus the payments related to long-term external debt due in the following 12 months.
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