Balance of payments and external debt – December 2018

In January - December 2018^p, the balance-of-payments current account posted a deficit of EUR 9,416 million, compared with EUR 5,970 million in January – December 2017. The deficit on trade in goods widened by EUR 2,628 million, the surplus on services income narrowed by EUR 102 million, the deficit of the primary income balance increased by EUR 322 million, and the surplus of the secondary income balance decreased by EUR 394 million.

Balance of payments current account (EUR million)
	January – December 2017 p			January - December 2018p
	CREDIT	DEBIT	BALANCE	CREDIT	DEBIT	BALANCE
CURRENT ACCOUNT (A+B+C)	85,627	91,597	-5,970	91,536	100,952	-9,416
A. Goods and services	77,880	81,853	-3,973	83,897	90,600	-6,703
a. Goods	57,187	69,370	-12,183	61,881	76,692	-14,811
b. Services	20,693	12,483	8,210	22,016	13,908	8,108
-  manufacturing services on physical inputs owned by others	2,886	183	2,703	2,794	177	2,617
- transport	6,186	2,358	3,828	6,509	2,793	3,716
- tourism-travel	2,237	3,074	-837	2,453	3,656	-1,203
- other	9,384	6,868	2,516	10,260	7,282	2,978
B. Primary income	3,248	7,886	-4,638	3,429	8,389	-4,960
C. Secondary income	4,499	1,858	2,641	4,210	1,963	2,247
p) provisional data

Non-residents’ direct investment in Romania^e totalled EUR 4,936 million (compared with EUR   4,797 million in January – December 2017), of which equity (including estimated net reinvestment of earnings) amounted to EUR 4,042 million and intercompany lending recorded a net value of EUR 894 million.

In January – December 2018, total external debt increased by EUR 1,115 million, of which:

— long-term external debt at end-December 2018 stood at EUR 67,219 million (68.3 percent of total external debt), down 1.9 percent from end-2017;

— short-term external debt at end-December 2018 amounted to EUR 31,257 million (31.7 percent of total external debt), up 8.4 percent against end-2017.

Long-term external debt service ratio ran at 20.7 percent in January - December 2018 against 25 percent in 2017. At end-2018, goods and services import cover stood at 4.9 months, as compared to 5.4 months at end-2017.

At end-2018, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 74.6 percent, against 79 percent at end-2017.

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 is set forth 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:

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. 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;

3.2. Services: Source: Quarterly Survey on International Trade in Services;

3.3. Primary income: includes compensation of employees, investment income (direct investment, portfolio investment, other investment) and other primary income (taxes, subsidies);

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 credits and advances, liabilities derived 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. The balance of external public debt is cash-based (excluding unmatured accrued interest). 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. 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.

7. Long-term external debt service ratio is calculated as a ratio of long-term external debt service to exports of goods and services.

8. 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.

9. 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.