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BUCHAREST (Romania), March 12 (SeeNews) - Romania's trade deficit amounted to an estimated 1.26 billion euro ($1.416 billion) in January, up by 481.9 million euro on the year, the country's statistical office, INS, said on Tuesday.
Exports rose by 1.6% and imports increased 9.2% on the year, INS said in a statement.
The European Union absorbed 78.7% of Romania's exports in January and provided 74.2% of the country's imports.
Machinery and transport equipment accounted for 48.3% of Romanian exports and 36.8% of imports in the first month of the year.
Romania's trade deficit widened by an annual 17% to 15.1 billion euro in 2018.
ING analysts said on Tuesday that January trade gap in January is the largest January deficit since 2008 and that 'at this pace, the 2019 trade gap could turn from bad to terrible.'
"On the imports side, we can see that the share of fuel has increased, while decreasing on the export side, likely due to the cap on gas prices enacted by 114/2018 government emergency decree (the same one which included the bank levy)," ING Bank analysts said in a short note on Romania's economy.
On the other hand, analysts say, exports expanded at their slowest pace since April 2017 at a mere 1.6%. Even though traditionally, the auto sector is the only one posting a trade surplus, the trend doesn’t look supportive as these surpluses have been lower and lower throughout last year, they added.
"The central bank’s trade-off between reaching the CPI target while maintaining external competitiveness didn’t go that well in 2018. Inflation came into the target band helped by oil prices, but current account exceeded the medium term equilibrium level seen at 4% of GDP. With inflationary pressures persisting, the central bank is likely to accept weaker RON and short-term inflation overshooting target as currency vulnerabilities are on the rise," analysts concluded.