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Romania's central bank estimates the current account deficit will widen to 6% of the GDP in 2010

Romania should target a current account deficit of 6 percent of the gross domestic product (GDP) this year, also taking into consideration the European funds it should sponge, said the governor of Romania's Central Bank (BNR), Mugur Isarescu.

In 2009, the current account gap amounted to 5.05 billion euros, about 4.4 percent of last year's GDP, estimated by the National Statistics Institute (INS) at 491.27 billion lei. In 2008, the current account deficit represented 11.8 percent of the GDP.

The governor also said it is unknown if the shrinkage of last year's current account deficit was prompted by a lower economic activity or if the economic decrease paved the way to the contraction of the current account deficit, explaining that, if the first scenario is true, than it would be likely that an increase of the current account gap to prompt the economy's growth.

Isarescu mentioned the deficit will be influenced by several factors, among which the capital flows.

As to the current account gap for the first two months, Isarescu said the data are not eloquent, as these are compared to those reported in the same period of 2009, when imports plunged significantly.

The governor said he prefers an economic increase based more on exports than on consumption, although the advance is slower, as it is a healthier and lasting model.

The national currency's increase could have a partial influence over hiking exports, the BNR official mentioned.

Also, the BNR vice governor, Cristian Popa, declared the central bank will intervene on the market if the exchange rate's trend goes against the economy's evolution.

Sursa: http://www.newsin.ro

Tags: current account central deficit bnr