The trade deficit expanded much faster in July than in the first half of this year, going beyond 7 billion euros in seven months.
Imports topped the volume of exports by more than 1.2 billion euros in July, with growth against July 2005 standing at 59%. This growth rate is way above the 38% posted in the first six months.
In other words, the trade deficit widened at a strong pace in July amid imports worth almost 3.5 billion euros and exports standing at 2,2 billion euros, according to the data released by the National Statistics Institute.
The almost 60% trade deficit increase in July is the first slippage this year, after the continuous slowdown in the monthly growth pace of the trade deficit, from 69% in January to 20% in June. The minus posted in July is about 20% (200 million euros) above the level the National Forecast Commission (CNP) had projected for the respective month.
"July seems to have been an atypical month, with import growth beating expectations," says Ion Ghizdeanu, CNP chairman. In his opinion, the widening of the trade deficit will leave a visible mark in terms of the current account deficit, the more so as the remittances from Romanian people working abroad, which used to offset foreign currency outflows, are flat from last year.
Ghizdeanu links import growth to the inflows of foreign investments, which pushed technological imports higher.
"However, it's worth noting that imports are staying at a too high level this year, of around 3.5 billion euros per month, even during summer months," he said.
Thus, the trade deficit exceeded 7 million euros in the first seven months, up around 41% from the corresponding period of 2005.
Exports totalled almost 14.9 billion euros, while the value of imports topped 21.9 billion euros.
For the entire year, official estimates point to a trade deficit of 13.12 billion euros, only 27% higher compared with 2005.
For the target to be hit, the trade deficit needs to slow down in the last five months.
The widening of the trade deficit was primarily triggered by imports of cars and equipment, which rose by 33% against July 2005, to 818 million euros.
These imports came to account for almost a quarter (23.6%) in total commodities purchased from abroad.
Imports of mineral products soared by 13% in July to 514 million euros. At the same time, textiles and clothes followed the same downward trend both in terms of imports and exports, with imports reaching 295 million euros in July, only 3% higher against July 2005.
In terms of exports, the same segment of cars and equipment registered the strongest growth, by 27 percent, to 414 million euros. Technological exports account for a fifth in total commodities sold abroad.
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