Romania’s fob/cif trade deficit widened by 18.1% y/y to €3.6bn in Q3, thus returning to the sharp speed of deterioration that was interrupted by a more moderate development in Q2, the foreign trade data released by the statistics office revealed.

The advance in exports weakened while imports strengthened in Q3.

In the 12 months ending September, the exports increased by 9.1% y/y, not far from the 9.2% y/y advance seen in 2017. Imports advanced by 10.4% y/y compared to the 12.2% y/y advance in 2017, but this was not enough to keep the trade gap from widening: under fob/cif metrics it deepened by 17% y/y to €14bn while under fob/fob standards it hit €10.7bn (20% up y/y, over 5% of GDP).

The external balance improved temporarily in September, when the trade gap narrowed by 5.4% y/y to €971mn, but it is still premature to conclude that softer private consumption has already surfaced and significantly shifted the external balance. In the coming quarters, this might be the case as households’ incomes and consumer confidence are likely to deteriorate unless the government takes extreme steps to strengthen incomes (as the European Commission’s recently revealed Autumn Forecast implies).

The quarter’s performance was dragged down by the deep deficits in July-August when imports advanced faster than exports. Overall, both exports and imports are rising at slower rates compared to previous quarters but the export performance (the gap between the annual rise of exports and imports respectively) returned to negative territory after a short-lived improvement in Q2.

Foreign Trade ( €mn )	2007	2008	2014	2015	2016	2017	Q1 18	Q2 18	Q3 18	12M Sep-18
FOB Exports	29,380	33,725	52,460	54,609	57,392	62,644	16,988	16,988	16,872	66,893
	13.7%	14.8%	5.8%	4.1%	5.1%	9.2%	9.8%	10.2%	7.4%	9.1%
CIF Imports	50,883	57,240	58,508	62,970	67,364	75,604	19,710	20,580	20,509	80,904
	24.9%	12.5%	5.9%	7.6%	7.0%	12.2%	10.9%	8.7%	9.2%	10.4%
FOB Imports*	46,966	52,834	56,096	60,373	64,587	72,487	18,898	19,731	19,664	77,568
FOB/CIF Balance	-21,502	-23,516	-6,049	-8,360	-9,972	-12,960	-2,722	-3,591	-3,637	-14,011
Balance y/y	44.4%	9.4%	6.0%	38.2%	19.3%	30.0%	18.4%	2.0%	18.1%	17.3%
FOB/FOB Balance*	-17,585	-19,109	-3,637	-5,764	-7,195	-9,843	-1,910	-2,743	-2,791	-10,676
Balance y/y	49.6%	8.7%	6.1%	58.5%	24.8%	36.8%	21.9%	0.1%	21.1%	19.7%
Source: INS, BNR, *estimates