January-May FDI up to EUR 2.9 bln, 93.3 pc higher against earlier-year period.

The current account deficit of the balance of payments during the first five month of the year rose to EUR 3.3. bln, up 53.2 pc from the similar period last year, amid a decline in current transfers. Romanian authorities projected for this year a current account deficit cut to 8.5 pc GDP, from 8.7 pc a year ago.

According to the latest report by analysts at UniCredit, the deficit of the current account will keep rising, on the back of a rise in demand for investment imports, yet it is the growing foreign direct investments to ensure their sustainability, says the report. UniCredit has revised-up its current account deficit estimate, from the may level of 9.2 pc GDP to 9.5 pc GDP. According to data from the National bank of Romania, the January-May goods exchange led to a negative balance of EUR 3.48 bln, while the service department was slightly positive, at EUR 21 M. Current transfers were below those in the similar time interval of 2005, when referred to both the balance and gross entries.

The amounts Romania received between January to May this year come to a total of EUR 1.55 bln, from EUR 1.58 bln in the similar interval the previous year, and the transfer balance, EUR 1.25 BLN, down 9.5 pc.

Romania’s medium and long-term foreign debt on May 31, 2006 hit EUR 24.78 bln, up 0.9 pc from December 31, 2005.

The current account deficit was 85.7 pc compensated by direct foreign investments, whose value went up 93.3 pc January through May, to EUR 2.9 bln, from EUR 1.5 bln in the earlier-year period, according to data from the central bank.

Authorities predicted for 2006 that foreign investments would reach EUR 6.2 bln, which does not include the privatisations of the Romanian Commercial bank (BCR) and the savings and Consignments House (CEC). The total value of direct foreign investments in Romania might exceed EUR 9 bln this year, considering the earnings from the aforementioned privatisations. Provisional data from BNR point to direct foreign investments reaching EUR 5.2 bln in 2005. The Romanian Agency for Foreign Investments predicts that the revised level will top EUR 6 bln.

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