The current account deficit at the end of last year reached 4.4 billion euros, an increase of 43.9% compared with December 2003.
According to the 2004 Economic Pre-Accession Programme recently submitted to the European Commission by the Romanian authorities, this level accounts for 7.7% of Gross Domestic Product (GDP). NBR governor Mugur Isarescu said recently that the central bank had taken into account a forecast of 8.3% for Romania's economic growth in 2004.
Calculated under the old method, the current account deficit at the end of last year was 6.7% of GDP, clearly higher than the initial estimate of 5%.
For this year the central bank has estimated the current account deficit decrease at 6.8-7% of GDP - a level also negotiated with the International Monetary Fund - amid economic growth of over 5%.
The narrowing of the current account deficit will be also helped by the budget deficit decrease to 0.4-0.5% of GDP in 2005, less than half the level posted last year. The National Bank has maintained that, despite its rapid growth, the financing of deficit had been done healthily through autonomous capital inflows such that foreign currency reserves were able to see a significant increase last year and come to secure five months of imports. According to the latest estimates, the deficit was over 98% financed from direct foreign investments (including capital transfers).
Thus, the growth pace of the current account deficit compared with the same period of 2003 has accelerated strongly, compared with 31.5% in November and 22% in October. liviu.chiru@zf.ro
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