bne IntelliNews-Romania, GDP grew 1.8% qoq in Q2, weaker than expected

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Romania’s seasonally adjusted GDP was 1.8 in the second quarter after 2.5% q / q (revised from 2.9% q / q) in the first quarter, according to a preliminary report released by the Bureau of Statistics August 17. % T / t increased.

The annual growth rate jumped 13% year on year. This is the result of the blockade that crippled the economy in the second quarter of last year.

In the first half of the year, the economy grew 6.5% year-over-year, with the government’s estimate for the full year at 7%.

Growth rates have been slow compared to consensus expectations of growth rates above around 2% q / q and 14% y / y.

As a result, independent analysts have weakened their optimism, hoping for full-year growth in line with the government’s official forecast of 7%.

According to Valentin Tatar, chief economist at ING Romania, the outlook is not very bright and the central bank could postpone the hike in refinancing rates until November. Banks expect 7.5% growth this year, with significant (modest) upside risk, and 5% growth expected in 2022.

ING’s Tatar describes a pick-up in “revenge spending” in the private sector and public investment.

BCR Bank revised its growth forecast for Romania this year from 8% to 7.4%.

Prime Minister Floirin Citu paid tribute to the performance. “We have promised Romania to generate rapid economic growth and V-shaped returns. Thank you Romanians, the fastest comeback Romania has ever seen,” he said. Noted.

Citu has released figures that point to a battle for the head of the National Liberal Party. He was right, but it was also the toughest pandemic Romania had ever seen.

As a more cautious note, Ziarul Financiar says that every day analysts warn of the overheating economy. The trade deficit is widening rapidly (over 20 billion euros in 2021 for the first time since the last economic crisis) and the budget is pushing up the current account deficit. Despite much better prospects for recovery, the deficit remains at the projected level as a percentage of GDP (7.1%).

Two factors predict the economic recovery. Firstly, GDP in the second quarter only grew by 1.7% compared to the second quarter of 2019. The recovery beyond the pre-crisis peaks was achieved and reached even faster than initially expected, but growth remains fragile. Overheating is not common at such low growth rates, but it is not impossible if domestic supply is overwhelmed by high demand beyond a temporary period.

Second, the 1.8% q / q growth in the second quarter was real quarterly growth, as the indicators used for seasonal adjustment were “polluted” by the blockade which resulted in an unusual decline in GDP in the second quarter of the year. last year. Is overkill.

bne IntelliNews-Romania, GDP grew 1.8% qoq in Q2, weaker than expected

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