The declining inflows of foreign currency from current transferstend to become the main factor putting pressure on the currentaccount deficit, given that their drop is sharper than that of thetrade deficit, the traditional source of foreign deficit.
Financial and social issues in countries like Italy, Spain andGreece have affected the Romanians working abroad, who are nowsending less money back home. The inflows from current transfersfrom abroad, which are mainly money sent home by the Romaniansworking in other countries, went down by 37% in the first fourmonths compared with the same time of last year, while imports aregrowing faster, so that the pressure on the current account deficithas become worse, causing it to go up by 40.3% to 2.06 billioneuros.
Foreign remittances amounted to merely 1.55 billion euros in thefirst four months in 2010, compared with 2.46 billion euros in thesame time of last year.
The decline of transfers was caused by the fact that the mainsources of foreign remittances are countries in Southern Europe,which are going through a sovereign debt crisis and are coping witha high level of unemployment.
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