Foreign direct investments to cover more than 60% of the C/A gap this year, central bank says

Foreign direct investments will cover this year at least 60 percent of the current account deficit which will remain the same or even narrow a bit in the gross domestic product over last year’s level, the deputy director of statistics from the central bank, Constantin Chirca, said.

FDI this year will reach at least 7 billion euros since the growth pace of exports exceeds that of imports which should narrow the current account deficit below 14 percent of the GDP this year.

Romanians working abroad will send home at least 6 billion euros this year, Chirca said, adding 40 percent will be sent through transfers or banking services.

The 3.2 billion euros FDI in the first four months came mostly from sell-offs, 816 million euros from the privatization of electricity provider Electrica Sud and 57 million euros from the Ford investment.

Last year the balance of payments saw deficit of 16.87 billion euros stemming from the 17.59 billion euros commercial gap which was 49.6 percent wider than in 2006.

The current account deficit last year was 41.9 percent covered by FDI of 7.07 billion euros out of which capital participations and reinvested profit were of 45.9 percent and intra group credits 54.1 percent.

The current account deficit was 13.9 percent of the GDP which stood at 404.7 billion lei last year.

In the first four months this year the current account deficit was 66.5 percent covered by foreign investments.

NewsIn