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Balance of payments and external debt – March 2021

14.05.2021

In January - March 2021p, the balance-of-payments current account posted a deficit of EUR 2,549 million, compared with EUR 990 million in the same year-ago period. The breakdown shows that the deficit on trade in goods widened by EUR 891 million, the surplus on services increased by EUR 88 million, while the primary and secondary income surpluses narrowed by EUR 490 million and EUR 266 million, respectively.

Balance of payments current account (EUR million)
  January - March 2020 January - March 2021p
CREDIT DEBIT BALANCE CREDIT DEBIT BALANCE
CURRENT ACCOUNT (A+B+C) 26,055 27,045 -990 26,743 29,292 -2,549
A. Goods and services 22,036 24,339 -2,303 22,718 25,824 -3,106
a. Goods 15,800 20,305 -4,505 16,494 21,890 -5,396
b. Services 6,236 4,034 2,202 6,224 3,934 2,290
- manufacturing services on physical inputs owned by others 707 43 664 620 36 584
- transport 1,749 757 992 1,801 746 1,055
- tourism-travel 513 1,132 -619 267 647 -380
- other 3,267 2,102 1,165 3,536 2,505 1,031
B. Primary income 2,643 1,663 980 2,694 2,204 490
C. Secondary income 1,376 1,043 333 1,331 1,264 67

p - provisional data

Non-residents' direct investment e in Romania totalled EUR 1,535 million (compared with EUR -399 million in January - March 2020), of which equity (including the estimated net reinvestment of earnings) and intercompany lending recorded net values of EUR 1,371 million and EUR 164 million, respectively.

In January - March 2021, total external debt decreased by EUR 2,300 million, of which:

  • long-term external debt at end-March 2021 totalled EUR 89,457 million (72.4 percent of total external debt), down 3.6 percent against end-2020;
  • short-term external debt at end-March 2021 amounted to EUR 34,169 million (27.6 percent of total external debt), up 3.2 percent from end-2020.

Romania’s external debt and external debt service
  External debt External debt service, 3M 2021p
End-2020 End-March 2021p
I. Long-term external debt 92,826 89,457 4,155
I.1. Public debt 57,527 55,007 1,595
I.1.1. Direct public debt* 57,307 54,798 1,581
I.1.2. Publicly guaranteed debt 220 209 14
I.2. Non-publicly guaranteed debt,
   of which: 		34,139 33,260 2,560
1.2.1. Long-term deposits of non-residents 137 107 66
I.3. Debt of the monetary authority,
   of which: 		1,160 1,190 0
I.3.1. Allocation of SDRs 1,160 1,190 0
II. Short-term external debt 33,101 34,169e 13,848e
Total external debt (I+II) 125,927 123,626 18,003

e - estimates
p - provisional data
*) The decrease in direct public debt came from changes in prices of securities issued by the general government in amount of approximately EUR -1,628 million.

Long-term external debt service ratio ran at 18.3 percent in January - March 2021 against 20.1 percent in 2020. At end-March 2021, goods and services import cover stood at 4.7 months, as compared to 5.6 months at end-2020.

At end-March 2021, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 81.4 percent, against 90.7 percent at end-2020.

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. Data from the NBR’s statistical surveys on International Trade in Services and Foreign Direct Investment may be affected by the impact of the pandemic, which, in statistical terms, consisted in the reduction of the reporting samples and the ensuing expansion of internal estimates.
  3. The international methodological standard on balance of payments compilation is ensured by the IMF’s sixth edition of the 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.
  4. In order to analyse current account data, the following aspects should be considered:
    1. 4.1. Goods (on a BOP basis): Source: Source: National Institute of Statistics – 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. 4.2. Services: Source: Quarterly Survey on International Trade in Services;
    3. 4.3. Primary income: includes compensation of employees, investment income (direct investment, portfolio investment, other investment) and other primary income (taxes, subsidies);
    4. 4.4. Secondary income: includes current private transfers and transfers of the general government.
  5. 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.
  6. 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).
  7. External direct public debt includes external loans taken directly by the MPF and local governments, in compliance with the legislation on public debt, including government securities purchased by non-residents – calculated at market value. The value of government securities purchased by non-residents is estimated as a difference between the total value of issues by general government and the total value of holdings of government securities by resident institutional sector reported by the main financial intermediaries on their behalf and on behalf of their clients for which they render custody services, according to NBR Regulation No. 4/2014, as subsequently amended and supplemented.
  8. 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.
  9. Long-term external debt service ratio is calculated as a ratio of long-term external debt service to exports of goods and services.
  10. Import cover is calculated as a ratio of international reserves (foreign exchange + gold) at the end of period to average monthly imports of goods and services for the period under review.
  11. 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 14 June 2021.

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