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Balance of payments and external debt – May 2019

15.07.2019

In January - May 2019p, the balance-of-payments current account posted a deficit of EUR 3,401 million, compared with EUR 2,564 million in January - May 2018. The deficit on trade in goods widened by EUR 1,476 million, the surplus on services income increased by EUR 116 million, the deficit of the primary income balance narrowed by EUR 778 million, and the surplus of the secondary income balance decreased by EUR 255 million.

Balance of payments current account (EUR million)
  January - May 2018p January - May 2019p
CREDIT DEBIT BALANCE CREDIT DEBIT BALANCE
CURRENT ACCOUNT (A+B+C) 38,268 40,832 -2,564 41,108 44,509 -3,401
A. Goods and services 34,367 35,982 -1,615 36,708 39,683 -2,975
a. Goods 25,686 30,562 -4,876 26,918 33,270 -6,352
b. Services 8,681 5,420 3,261 9,790 6,413 3,377
- manufacturing services on physical inputs owned by others 1,151 83 1,068 1,235 68 1,167
- transport 2,589 1,104 1,485 3,034 1,301 1,733
- tourism-travel 816 1,305 -489 864 1,559 -695
- other 4,125 2,928 1,197 4,657 3,485 1,172
B. Primary income 2,191 4,028 -1,837 2,322 3,381 -1,059
C. Secondary income 1,710 822 888 2,078 1,445 633

p) provisional data

Non-residents' direct investment in Romaniae totalled EUR 1,491 million (compared with EUR 1,660 million in January - May 2018), of which equity (including estimated net reinvestment of earnings) amounted to EUR 1,476 million and intercompany lending recorded a net value of EUR 15 million.

In January - May 2019, total external debt increased by EUR 4 109 million, of which:

  • long-term external debt at end-May 2019 stood at EUR 69,455 million (67.1 percent of total external debt), up 2.2 percent against end-2018;
  • short-term external debt at end-May 2019 amounted to EUR 34,071 million (32.9 percent of total external debt), up 8.3 percent from end-2018.

Romania’s external debt and external debt service
  External debt External debt service, 5M 2019p
End-2018p End-May 2019p
I. Long-term external debt 67,966 69,455 7,143
I.1. Public debt 34,763 36,823 2,164
I.1.1. Direct public debt 34,415 36,489 2,143
I.1.2. Publicly guaranteed debt 348 334 21
I.2. Non-publicly guaranteed debt,
   of which: 		32,007 31,414 4,958
1.2.1. Long-term deposits of non-residents 2,241 710 759
I.3. Debt of the monetary authority,
   of which: 		1,196 1,218 21
I.3.1. Allocation of SDRs 1,196 1,218 21
II. Short-term external debt 31,451 34,071 21,231e
Total external debt (I+II) 99,417 103,526 28,374

e) estimates
p) provisional data

Long-term external debt service ratio ran at 19.5 percent in January - May 2019 against 21.2 percent in 2018. At end-May 2019, goods and services import cover stood at 4.6 months, as compared to 4.9 months at end-2018.

At end-May 2019, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 72.6 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 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. http://www.insse.ro/cms/files/statistici/Importuri_CIF_FOB/coeficient_CIF_FOB.pdf. 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 monthly press release on the “Balance of payments and external debt” will be issued on 13 August 2019.

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