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EIU: Romania Highly Vulnerable To Intl Turmoil Due To High Curr Acct Gap

Romania is one of the countries most vulnerable to the financial turbulence, as its current account deficit is likely to remain above 10% until 2013, the Economist Intelligence Unit, or EIU, said in a report.
EIU: Romania Highly Vulnerable To Intl Turmoil Due To High Curr Acct Gap
17 sept. 2008, 15:56, English

"(…) The country’s current account gap will exceed 10% until 2013, fueled by an economic growth and especially due to higher consumption," EIU shows in its most recent report.

The Romanian current account deficit widened 8.5% on the year in the first half to EUR7.981 billion, primarily due to a wider trade deficit, the central bank said.

Romania’s foreign debt totaled EUR44.794 billion at the end of June, up 16.6% compared with the end of 2007.

Another weak point emphasized by the economists was the likely depreciation of the national currency leu over the coming period, as this could have a negative effect on the foreign debt as most of it is denominated in euro.

On the other hand, Prime Minister Calin Popescu Tariceanu said the international crisis will not affect Romania.

Analysts polled by Mediafax Tuesday said that the international financial crisis will affect Romania indirectly as capital flows might be narrowed and investors’ appetite for risk might be limited.