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Balance of payments and external debt – February 2019

12.04.2019

In January - February 2019p, the balance-of-payments current account posted a deficit of EUR 568 million, compared with EUR 425 million in January - February 2018. The deficit on trade in goods widened by EUR 671 million, the surplus on services income increased by EUR 122 million, the primary income balance recorded a surplus of EUR 94 million compared to a deficit of EUR 117 million, and the surplus of the secondary income balance increased by EUR 195 million.

Balance of payments current account (EUR million)
  January - February 2018p January - February 2019p
CREDIT DEBIT BALANCE CREDIT DEBIT BALANCE
CURRENT ACCOUNT (A+B+C) 14,941 15,366 -425 16,819 17,387 -568
A. Goods and services 13,150 13,578 -428 14,274 15,251 -977
a. Goods 9,952 11,581 -1,629 10,516 12,816 -2,300
b. Services 3,198 1,997 1,201 3,758 2,435 1,323
- manufacturing services on physical inputs owned by others 455 28 427 492 25 467
- transport 949 399 550 1,113 514 599
- tourism-travel 306 489 -183 320 576 -256
- other 1,488 1,081 407 1,833 1,320 513
B. Primary income 1,299 1,416 -117 1,507 1,413 94
C. Secondary income 492 372 120 1,038 723 315

p - provisional data

Non-residents' direct investment in Romaniae totalled EUR 1,036 million (compared with EUR 704 million in January - February 2018), of which equity (including estimated net reinvestment of earnings) amounted to EUR 927 million and intercompany lending recorded a net value of EUR 109 million.

In February 2019, total external debt increased by EUR 193 million, of which:

  • long-term external debt at end-February 2019 stood at EUR 68,252 million (68.5 percent of total external debt), up 0.4 percent from end-2018;
  • short-term external debt at end-February 2019 amounted to EUR 31,358 million (31.5 percent of total external debt), down 0.3 percent against end-2018

Romania’s external debt and external debt service
  External debt External debt service, 2M 2019p
End-2018p End-February 2019p
I. Long-term external debt 67,966 68,252 1,789
I.1. Public debt 34,763 34,765 596
I.1.1. Direct public debt 34,415 34,424 586
I.1.2. Publicly guaranteed debt 348 341 10
I.2. Non-publicly guaranteed debt,
   of which: 		32,007 32,280 1,183
1.2.1. Long-term deposits of non-residents 2,241 2,022 258
I.3. Debt of the monetary authority,
   of which: 		1,196 1,207 10
I.3.1. Allocation of SDRs 1,196 1,207 10
II. Short-term external debt 31,451 31,358 8,759e
Total external debt (I+II) 99,417 99,610 10,548

e - estimates
p - provisional data

Long-term external debt service ratio ran at 12.5 percent in January - February 2019 against 21.2 percent in 2018. At end-February 2019, goods and services import cover stood at 4.8 months, as compared to 4.9 months at end-2018.

At end- February 2019, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 72.8 percent, against 74.3 percent at end-2018.

Methodological Notes

  1. 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 is set forth 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. 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. External debt includes the following debt financial instruments: currency and deposits, loans, debt securities, trade credit and advances, liabilities from insurance, pension, and standardised guarantee schemes, SDR allocation and other liabilities. (According to IMF External Debt Statistics Guide for Compilers and Users, 2014).
  6. 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 government bonds acquired by non-residents – calculated at market value. The value of holdings by non-residents is estimated as a difference between the total value of bonds issued by the General Government and the total value of holdings by residents reported by the main financial intermediaries on their behalf and on behalf of their clients, according to NBR Regulation No. 4/2014, as subsequently amended and supplemented.
  7. 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.
  8. Long-term external debt service ratio is calculated as a ratio of long-term external debt service to exports of goods and services
  9. 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.
  10. 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.

The next press release “Balance of payments and external debt” will be issued on 14 May 2019.

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