Banca Nationala a Romaniei : Balance of payments and external debt – February 2021

In January - February 2021^p,the balance-of-payments current accountposted a deficit of EUR 1,627 million, compared with EUR 431 million in the same year-ago period. The breakdown shows that the deficit on trade in goods widened by EUR 485 million, the surplus on services increased by EUR 265 million, the primary income surplus narrowed by EUR 463 million and the secondary income balance recorded a deficit of EUR 358 million, compared with a surplus of EUR 155 million in the same year-ago period.

Balance of payments current account (EUR million)

	January - February 2020	January - February 2021p
CREDIT	DEBIT	BALANCE	CREDIT	DEBIT	BALANCE
CURRENT ACCOUNT (A+B+C)	18,180	18,611	-431	17,261	18,888	-1,627
A. Goods and services	14,922	16,284	-1,362	14,498	16,080	-1,582
a. Goods	10,837	13,454	-2,617	10,456	13,558	-3,102
b. Services	4,085	2,830	1,255	4,042	2,522	1,520
- manufacturing services on physical inputs owned by others	495	31	464	410	24	386
- transport	1,188	541	647	1,186	485	701
- tourism-travel	392	877	-485	171	391	-220
- other	2,010	1,381	629	2,275	1,622	653
B. Primary income	2,273	1,497	776	2,153	1,840	313
C. Secondary income	985	830	155	610	968	-358

p - provisional data

Non-residents' direct investment in Romania^etotalled EUR 578 million (compared with EUR 690 million in January - February 2020), of which equity (including the estimated net reinvestment of earnings) and intercompany lending recorded net values of EUR 823 million and EUR -245 million respectively.

In January - February 2021, total external debt decreased by EUR 2,311 million, of which:

• long-term external debt at end-February 2021 totalled EUR 90,947 million (73.6 percent of total external debt), down 2.0 percent against end-2020;
• short-term external debt at end-February 2021 amounted to EUR 32,669 million (26.4 percent of total external debt), down 1.3 percent from end-2020.
• Romania's external debt and external debt service

	External debt	External debt service, 2M 2021p
End-2020	End-February 2021p
I. Long-term external debt	92,826	90,947	2,626
I.1. Public debt	57,527	56,214	1,333
I.1.1. Direct public debt	57,307	56,001	1,325
I.1.2. Publicly guaranteed debt	220	213	8
I.2. Non-publicly guaranteed debt, of which:	34,139	33,563	1,293
1.2.1. Long-term deposits of non-residents	137	105	57
I.3. Debt of the monetary authority, of which:	1,160	1,170	0
I.3.1. Allocation of SDRs	1,160	1,170	0
II. Short-term external debt	33,101	32,669e	9,555e
Total external debt (I+II)	125,927	123,616	12,181

e - estimates
p - provisional data
*) The decrease in direct public debt came from changes in prices of securities issued by the general government, in amount of approximately EUR -1,348 million.

Long-term external debt service ratioran at 18.1 percent in January - February 2021 against 20.1 percent in 2020. At end-February 2021, goods and services import cover stood at 5.0 months, as compared to 5.6 months at end-2020.

At end-February 2021, the ratio of the National Bank of Romania's foreign exchange reserves to short-term external debt by remaining maturity came in at 83.5 percent, against 90.7 percent at end-2020.

Methodological Notes

1. Data are updated on a monthly basis. Data for the current period together with the revised data for the base period are available underData sets; historical monthly and quarterly data back to 2005 are available in theInteractive database.
2. Data from the NBR's statistical surveys on International Trade in Services and Foreign Direct Investment may be affected by the impact of the pandemic, which, in statistical terms, consisted in the reduction of the reporting samples and the ensuing expansion of internal estimates.
3. The international methodological standard on balance of payments compilation is ensured by the IMF's sixth edition of theBalance of Payments and International Investment Position Manual (BPM6).The BPM6 methodology has been transposed into the EU legislation based on Commission Regulation (EU) No 555/2012 on Community statistics concerning balance of payments, international trade in services and foreign direct investment, as regards the update of data requirements and definitions.
4. In order to analyse current account data, the following aspects should be considered:

   1. 4.1. Goods (on a BOP basis): Source: Source: National Institute of Statistics - International Trade of Goods. Imports FOB are calculated by the NBR based on the CIF/FOB conversion factor set by the NIS. The balance of payments principle consists in entering goods based on the "change in economic ownership" criterion (goods acquired by residents are included, irrespective of whether the goods cross the country border or not), while in international trade statistics goods are recorded based on the "cross-border" criterion (goods are recorded when crossing the border, irrespective of whether they belong to residents or not).In order to ensure compliance with the "change in economic ownership" principle, the NIS data are adjusted by the NBR, so that the values of exports and imports of goods in the BOP statistics are different from those in international trade statistics.The main difference between the two types of statistics comes frommanufacturing services on physical inputs owned by otherswhich, according to BPM6, has been reclassified fromGoods to Servicesand the data source has been changed fromInternational Trade in Goods to the Quarterly Survey on international trade in servicesconducted by the NBR;
   2. 4.2. Services: Source: Quarterly Survey on International Trade in Services;
   3. 4.3. Primary income: includes compensation of employees, investment income (direct investment, portfolio investment, other investment) and other primary income (taxes, subsidies);
   4. 4.4. Secondary income: includes current private transfers and transfers of the general government.
5. Foreign direct investment: The permanent debt between affiliated financial intermediaries (banks, NBFIs) is not treated as direct investment, but recorded underfinancial account/other investment.
6. External debtincludes the following debt financial instruments: currency and deposits, loans, debt securities, trade credit and advances, liabilities from insurance, pension, and standardised guarantee schemes, SDR allocation and other liabilities (according to IMFExternal Debt Statistics Guide for Compilers and Users, 2014).
7. External direct public debtincludes external loans taken directly by the MPF and local governments, in compliance with the legislation on public debt, including government securities purchased by non-residents - calculated at market value. The value of government securities purchased by non-residents is estimated as a difference between the total value of issues by general government and the total value of holdings of government securities by resident institutional sector reported by the main financial intermediaries on their behalf and on behalf of their clients for which they render custody services, according to NBR Regulation No. 4/2014, as subsequently amended and supplemented.
8. External publicly guaranteed debtincludes external loans guaranteed by the Ministry of Public Finance and local governments in compliance with the legislation on public debt.
9. Long-term external debt service ratio is calculated as a ratio of long-term external debt service to exports of goods and services.
10. Import cover is calculated as a ratio of international reserves (foreign exchange + gold) at the end of period to average monthly imports of goods and services for the period under review.
11. Short-term external debt by remaining maturity refers to the short-term external debt outstanding at the end of period plus the payments related to long-term external debt due in the following 12 months.
12. Statistical data for the period 2013 - September 2019 have been updated according to the framework for the 2019 benchmark revision. Starting with October 2019, the data are compiled in the same methodological framework. More details can be found at:Process of statistical data revision

The next monthly press release on the "Balance of payments and external debt" will be issued on14 May 2021.