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Balance of payments and external debt – July 2021

13.09.2021

In January - July 2021p, the balance-of-payments current account posted a deficit of EUR 9,057 million, compared with EUR 5,350 million in the same year-ago period. The breakdown shows that the deficits on trade in goods and on primary income widened by EUR 2,321 million and EUR 854 million, respectively; the surplus on services and that on secondary income decreased by EUR 267 million and EUR 265 million, respectively.

Balance of payments current account (EUR million)
  January - July 2020 January - July 2021p
CREDIT DEBIT BALANCE CREDIT DEBIT BALANCE
CURRENT ACCOUNT (A+B+C) 52,096 57,446 -5,350 62,527 71,584 -9,057
A. Goods and services 44,907 49,997 -5,090 54,835 62,513 -7,678
a. Goods 31,488 41,912 -10,424 39,889 52,634 -12,745
b. Services 13,419 8,085 5,334 14,946 9,879 5,067
- manufacturing services on physical inputs owned by others 1,436 82 1,354 1,396 96 1,300
- transport 3,783 1,506 2,277 4,234 1,838 2,396
- tourism-travel 715 1,638 -923 1,279 2,290 -1,011
- other 7,485 4,859 2,626 8,037 5,655 2,382
B. Primary income 4,175 5,291 -1,116 4,457 6,427 -1,970
C. Secondary income 3,014 2,158 856 3,235 2,644 591

p - provisional data

Non-residents' direct investment in Romaniae totalled EUR 3,962 million (compared with EUR 1,222 million in January - July 2020), of which equity (including the estimated net reinvestment of earnings) and intercompany lending recorded net values of EUR 3,353 million and EUR 609 million, respectively.

In January - July 2021, total external debt increased by EUR 6,058 million, of which:

  • long-term external debt at end-July 2021 totalled EUR 95,931 million (72.7 percent of total external debt), up 3.3 percent against end-2020;
  • short-term external debt at end-July 2021 amounted to EUR 36,054 million (27.3 percent of total external debt), up 8.9 percent from end-2020.

Romania’s external debt and external debt service
  External debt External debt service, 7M 2021p
End-2020p End-July 2021p
I. Long-term external debt 92,826 95,931 9,319
I.1. Public debt 57,527 60,442 2,487
I.1.1. Direct public debt 57,307 60,251 2,450
I.1.2. Publicly guaranteed debt 220 191 37
I.2. Non-publicly guaranteed debt,
   of which: 		34,139 34,306 6,832
1.2.1. Long-term deposits of non-residents 137 297 21
I.3. Debt of the monetary authority,
   of which: 		1,160 1,183 0
I.3.1. Allocation of SDRs 1,160 1,183 0
II. Short-term external debt 33,101 36,054e 43,442e
Total external debt (I+II) 125,927 131,985 52,761

e - estimates
p - provisional data

Long-term external debt service ratio ran at 17.0 percent in January - July 2021 against 20.1 percent in 2020. At end-July 2021, goods and services import cover stood at 4.9 months, as compared to 5.6 months at end-2020.

At end-July 2021, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 84.8 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 going back to 2005 are available in theInteractive 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: 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” criterion, the NIS data are adjusted by the NBR, therefore the values of exports and imports of goods in the BOP statistics are different from those in the statistics on the international trade of goods;
    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 allocations and other liabilities (according to the IMF’s External Debt Statistics Guide for Compilers and Users, 2014).
  7. External direct public debt includes external loans taken directly by the Ministry of Finance 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 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 October 2021.

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