Eurostat: Romania records largest deficit in the EU

Romania leads the top 10 countries with current account deficits registered in the fourth quarter of 2020. At the other end of the list are EU member states registering surpluses, led by Germany, according to the latest data released by Eurostat, the EU statistical office.

In the fourth quarter of 2020, the EU’s seasonally adjusted current account balance of payments shows a surplus of EUR 110.3 billion (3.2 percent of GDP), up from a surplus of EUR 66.0 billion (or 1.9 percent of GDP) recorded in the same period a year ago.

The current account covers all transactions between resident and non-resident entities and refers to the international trade of goods and services, as well as primary and secondary income.

Romania managed to grab the top spot, unfortunately on the negative side of the list: The country tops the 10 countries (out of the 27 member states) recording current account balance deficits in the fourth quarter of 2020, with a record negative EUR 3.5 billion.

In the second spot, we find Greece with a EUR 2.7 billion deficit, while the third spot is shared by Bulgaria, Estonia, and Cyprus, with deficits of EUR 0.8 billion each.

The EU’s current account balance. Calendar and seasonally adjusted, as % of GDP. Image source: Eurostat

On the positive side, there is Germany, which recorded a stunning EUR 70.4 billion surplus, followed by Italy and the Netherlands with EUR 22.2 billion and EUR 13.9 billion surpluses, respectively.

In the first two months of this year, Romania’s deficit was EUR 3.1 billion, up 15 percent compared to the same period in 2020, which means the current account balance deficit also grew further in the first quarter of 2021, reports Hungarian news portal Maszol.

The main problem with Romania’s deficit is the external account balance, which registered a deficit of EUR 19 billion in 2020, counterbalanced in part by a surplus of EUR 9.6 billion recorded in the services segment.

“Our deficit is huge in agricultural products,” Adrian Vasilescu, the vice president of the National Bank of Romania said. This is because domestic production doesn’t cover consumption, and additionally, because some of the imported goods – after minimal processing – are exported. In some cases, 80 percent of imported goods are exported, Vasilescu added.

Title image: Pixabay

Author: István Fekete