Financial Studies (Dec 2022)
PROSPECTS FOR ACHIEVING ROMANIA'S EXTERNAL EQUILIBRIUM
Abstract
The COVID-19 pandemic, the health protection measures, and the policies meant to limit the economic effects of the disease have affected the world's economies on multiple levels, the international trade being one of the most seriously influenced domains. The paper aims to highlight the effects of the pandemic on Romania's current account, as well as some directions of action aimed at improving the external deficit of our country. The methodology used in the article joins the empirical analysis of statistical data and their interpretation, with the identification of causalities. The analysis shows that the uncertainty regarding the evolution of COVID-19 and the measures adopted by the authorities to stop the spread of the coronavirus affected negatively, especially in 2020, the current account, and its way of financing. The paper highlights some elements that can hamper the decrease of the external deficit in the future (the large needs of external financing in the coming years, the dependence of the economy on imports, the unfavourable structure of Romanian exports and imports), as well as some directions of action intended to support the improvement of the external deficit of our country, including supporting the recovery of the economy, reducing the budget deficit, improving the domestic offer, and the research and innovation activity, etc.
