Romania’s GDP picks up in Q2 after two sluggish quarters but 5.5% growth target now unrealistic

Romania’s GDP picks up in Q2 after two sluggish quarters but 5.5% growth target now unrealistic
Romania 2Q18 growth rate strengthened marginally to 4.1% y/y from 4.0% in Q1
By bne IntelliNews August 16, 2018

Romania’s GDP growth picked up by 1.4% q/q, in seasonally adjusted terms, in Q2, after it edged up by a total of 0.4% over the past two quarters, the statistics office reported in a flash estimate.

The annual growth rate strengthened marginally to 4.1% y/y from 4.0% in Q1. The 5.5% y/y target for the overall 2018 growth rate inked by the state forecasting body and used by the government in the first budget revision now seem unrealistic.

The annual growth rate is likely to be subject to high base effects during Q3, and to lesser extent in Q4. Weaker crops expected this summer will result in softer GDP growth rate in Q3 and possibly in Q4, say analysts.

The European Commission revised downward its projection for Romania’s GDP growth this year from 4.5% to 4.1% in its July 12 Summer Forecast. The growth will further ease to 3.8% y/y in 2019 (a milder revision from the 3.9% projection inked in the Spring forecast).

 

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