Isarescu: A correction of current-account deficit to 8-9pc would suffice

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A correction in the current-account deficit to 8-9 percent of the Gross Domestic Product (GDP) would be enough to Romania, Governor of the National Bank of Romania (BNR) Mugur Isarescu told a Central and South-Eastern European Financial Forum on Thursday.
‘The 2007 current-account deficit of 14 percent was too high. Even a 12-percent would have been too high a deficit. A correction in the current-account deficit to 8-9 percent would suffice to Romania,’ said Isarescu.
He also mentioned that narrowing the current-account deficit should be achieved in a limited and gradual manner.
Romania’s balance of payments in the first quarter of 2009 was 709 million euros in deficit, down 82.1 percent from the first quarter of 2008, according to data with the BNR. A dominant influence on the narrowing of the current-account deficit was a decline by 67.2 percent in the first three months of 2009 of the foreign trade deficit from the first three months of 2008, standing at 1.337 billion euros.
Q1, 2009 current-account deficit was fully financed by direct investments of non-residents in Romania (compared with 42.8 percent in Q1, 2008), which stood at 1.456 billion euros, compared with 1.691 billion euros in Q1 2008. Out of the total of 1.4 56 billion euros, capital contributions made up 50.8 percent, intra-group loans 39.9 percent and reinvested profit 9.3 percent.
Romania’s National Economic Projection Board (CNP) has projected the 2009 current- account deficit at 7.3 percent of the GDP (9.39 billion euros), down from a previous 10.3-percent-of¬the-GDP projection (14.84 billion euros), according to the spring projections for 2009-2013.
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