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Balance of payments and external debt – September 2019

13.11.2019

In January - September 2019p, the balance-of-payments current account posted a deficit of EUR 8,103 million, compared with EUR 6,798 million in the same year-ago period. The deficit on trade in goods widened by EUR 2,342 million, the surplus on services income increased by EUR 343 million, the deficit of the primary income balance narrowed by EUR 747 million, and the surplus of the secondary income balance decreased by EUR 53 million.

Balance of payments current account (EUR million)
  January - September 2018p January - September 2019p
CREDIT DEBIT BALANCE CREDIT DEBIT BALANCE
CURRENT ACCOUNT (A+B+C) 69,252 76,050 -6,798 73,248 81,351 -8,103
A. Goods and services 63,271 66,814 -3,543 66,417 71,959 -5,542
a. Goods 46,412 56,199 -9,787 47,338 59,467 -12,129
b. Services 16,859 10,615 6,244 19,079 12,492 6,587
- manufacturing services on physical inputs owned by others 2,135 142 1,993 2,220 127 2,093
- transport 5,060 2,153 2,907 5,794 2,583 3,211
- tourism-travel 1,779 2,718 -939 1,950 3,260 -1,310
- other 7,885 5,602 2,283 9,115 6,522 2,593
B. Primary income 2,976 7,766 -4,790 3,158 7,201 -4,043
C. Secondary income 3,005 1,470 1,535 3,673 2,191 1,482

p - provisional data

Non-residents' direct investment in Romaniae totalled EUR 4,237 million (compared with EUR 4,520 million in January - September 2018), of which equity (including estimated net reinvestment of earnings) amounted to EUR 3,473 million and intercompany lending recorded a net value of EUR 764 million.

In January - September 2019, total external debt increased by EUR 8,398 million, of which:

  • long-term external debt at end-September 2019 stood at EUR 73,831 million (68.2 percent of total external debt), up 8.1 percent against end-2018;
  • short-term external debt at end-September 2019 amounted to EUR 34,408 million (31.8 percent of total external debt), up 9 percent from end-2018.

Romania’s external debt and external debt service
  External debt External debt service, 9M 2019p
End-2018p End-September 2019p
I. Long-term external debt 68,286 73,831 11,363
I.1. Public debt 34,850 40,861 2,791
I.1.1. Direct public debt 34,499 40,556 2,736
I.1.2. Publicly guaranteed debt 351 305 55
I.2. Non-publicly guaranteed debt,
   of which: 		32,240 31,741 8,562
1.2.1. Long-term deposits of non-residents 1,433 630 847
I.3. Debt of the monetary authority,
   of which: 		1,196 1,229 10
I.3.1. Allocation of SDRs 1,196 1,229 10
II. Short-term external debt 31,555 34,408e 36,293e
Total external debt (I+II) 99,841 108,239 47,656

e - estimates
p - provisional data
*) The increase of direct public debt in the first nine months of 2019 came mainly from the Euro-bonds issued by the Ministry of Public Finance, with a face value of EUR 5,000 million, as well as from revaluations due to price changes of the securities issued by the general government, worth around EUR 2,761 million, diminished by the repayments of loans taken from international bodies, amounting to EUR 1,594 million.

Long-term external debt service ratio ran at 17.1 percent in January - September 2019 against 22.6 percent in 2018. At end-September 2019, goods and services import cover stood at 5 months, as compared to 4.9 months at end-2018.

At end- September 2019, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 75 percent, against 74.1 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 16 December 2019.

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