Foreign deficit hits record high

The current account deficit increased by one third last year, to a record 6.8 billion euros, which is equivalent to about 9% of the GDP, according to preliminary figures released by the National Bank. The main reason for this rise of the foreign deficit is a trade imbalance, that is the difference between exports and imports, estimated by the National Bank at 7.8 billion euros, 47% more than in 2004. The NBR has not published data concerning the revenues chapters or current transfers yet. The foreign deficit is financed by foreign direct investments that totalled about 5 billion euros last year, with the rest to be financed through foreign debt or through domestic market debt. Although analysts are concerned by the 33% increase in the current account deficit, it is really no surprise, since it was predicted by estimates of the National Forecast Commission (CNP) in autumn. “Actually, it is good news,” Ion Ghizdeanu, head of the institution, told ZF. He believes that the fact that the foreign deficit steadied at 8% of the GDP (estimated by Ghizdeanu at 77 billion euros) is, however, good news, since it was a tough year. Especially when compared to 2004 when the figure of foreign deficit was 8.7%. ZF