Romania, Third Among EU Economies Regarding Net Personal Transfers as Percentage of GDP and First in Nominal Terms
In 2021, the EU countries that generated surpluses of personal transfers, representing more than 1% of their respective gross domestic product (GDP), were Croatia (2.7% of GDP), Bulgaria (1.6%), Romania (1.5%) and Latvia (1.1%).
In contrast, Cyprus (-0.9%), France and Spain (each -0.5%) generated the largest deficits of personal transfers vis-à-vis the rest of the world as a share of their respective GDP.
In terms of personal transfers and compensation of employees related to economic result, our country is placed also third among EU member states, with a percentage of 3.2% of GDP, after Croatia (7.3% of GDP) and Latvia (3.3%) and above Luxemburg (2.7%), Bulgaria (2.4%), Belgium (2.3%), Slovakia (2.1%), Portugal and Hungary (both with 2%).
However, in nominal terms, the net amount in Romania was the highest by far – 3,504.6 mln. €, compared to Poland (1,973 mln. €), Croatia (1,563.5 mln. €), Bulgaria (1,146.9 mln. €). On the positive range, Lithuania (394,5 mln. €), Latvia (381,0 mln. €) and Hungary (361,6 mln. €) kept a considerable distance.
As expected, there were major developed economies that had a sizeable net negative inflow, as France (-12,023 mln. €), Italy (6,508,6 mln. €), Spain (-6,299 mln. €) and Germany (-6,179 mln. €). They were followed by Belgium (-1,915 mln. €), Ireland (1,322 mln. €), Greece (-812 mln. € !), Austria (-772 mln. €) and Netherlands (-527,6 mln. €). Noticeably, Czechia was also on the negative range (-235 mln. €), more than Finland (-170 mln. €).
Romania and Portugal, amongst others, could considerably reduce their negative current account balances through these net inflows. For Romania, an almost equally positive balance for compensation of employees (€3.6 billion) and for personal transfers (€3.5 billion) contributed to this development. In contrast to this, Portugal benefited mainly from highly positive balances of personal transfers.
In 2021, three Member States recorded a current account surplus, which would have turned into a deficit without the impact of the net incoming flows. Most prominently, France showed a current account surplus of €9 billion; without these net incoming flows, this surplus would have turned into a considerable deficit of €4.5 billion in 2021. Responsible for this switch was mostly the net income generated in Switzerland, Luxembourg, and Germany. Belgium showed a current account surplus of €2.2 billion, which would have turned into a current account deficit of €3.4 billion. Belgians generated most of their net compensation of employees’ inflows by working for EU institutions (€4.5 billion) and for institutional units in Luxembourg (€3.7 billion). For Croatia, the current account balance turned from a minus of €1.9 billion into a surplus of €1.8 billion.