Romania’s Gross Domestic Product (GDP) went down 1 percent in seasonally adjusted terms in the second quarter of 2014 compared to the previous quarter, but against the similar period of 2013, Romania’s economy grew by 1.4 percent, according to estimated flash data released by the National Statistics Institute (INS) on Thursday.
Romania’s Q2, 2014 GDP was 1.2 percent higher in unadjusted terms than in Q2, 2013.
‘In H1, 2014, the GDP rose by 2.4 percent in unadjusted terms compared to H1, 2013 and by 2.6 percent, seasonally adjusted data,’ the release reads. According to analysts, after two consecutive quarters of economic contraction, the Romanian economy is entering technical recession.
In early July, INS revised upwards the data referring to Romania’s economic growth in the first three months of 2014, from 3.8 percent to 3.9 percent, compared to the similar period of 2013, as well as those regarding the last quarter of 2013, from 0.1 percent to 0.2 percent.
At end-May 2014, the National Prognosis Commission reviewed slightly upwards the projection for Romania’s economic growth in 2014 and 2015, to 2.5 percent and 2.6 percent respectively.
PM Ponta: Romania’s economic growth continues, one of the strongest in EU
Prime Minister Victor Ponta announced on Thursday the official figures confirm that Romania’s economic growth continues, one of the ‘strongest in the EU.’
‘The official data confirm the good news, Romania’s economic growth continues! A 2.6 percent increase compared to the same half of last year, 9.1 percent industrial growth and meeting the target of a minimum 2.5 percent increase for this year. We still have one of the strongest growths in the EU. It’s like we were driving 130 km per hour and now we are driving 100 km per hour, but we are moving forward!’ Ponta wrote on his Facebook page.
The Premier also said the pace of the economic growth should be sustained by the cut in the social security contributions (CAS); he pointed out that ‘more could be done’ if there were no obstacles from ‘a regime that only wants austerity policies.’
‘We badly need the CAS cut, at least starting with October 1, not to slower the growth pace, especially given the bad signs in the region. We still have growth space for this autumn and that’s why we increased the minimum wage, we introduced the benefits for the people paying loans and we removed the tax on the reinvested profit. If we were not blocked by a regime that only wants austerity policies, we could do more! For this reason, the upcoming elections are so important!’ Ponta wrote.
Liviu Voinea: Despite slowdown, Romanian economy on track for targeted 2.8 year-end advance
Despite the slowdown registered in Q2 in its growth pace, Romania’s economy is still on track for the 2.8 percent year-end growth target the state budget is built upon, Minister-delegate for Budget Liviu Voinea told Agerpres on Thursday.
‘The all-year target is an economic growth of 2.8 percent. In H1 we have an increase of 2.4 percent in raw terms and of 2.6 percent in adjusted terms, which is even slightly higher than the one registered in mid-2013. We ended last year with an economic growth of 3.5 percent. We are on track for the 2.8 percent all-year increase the budget is built upon,’ said Voinea.
The Minister-delegate for Budget mentioned that there has been a change in the structure of economic growth, with agriculture now having a negative contribution to the advance of economy, contrary to last year, when it had substantially pushed forward the GDP growth.
‘Instead, consumption now has a positive contribution, after the stagnation last year. Industrial output and exports also have positive contributions. The quarterly evolution is not that important because it is influenced by seasonal, short-term factors, it’s the annualized economic growth rate that really matters. We have an economic growth of 2.4 percent, which is a very good rate above the euro zone and the EU average. The economic growth pace has slowed down in comparison with, say, Q1. But this is not a decline, it’s just a slowdown in the growth pace,’ said Liviu Voinea.
The Finance Ministry official said that the economic growth could pick up speed in the second half of 2014 as a result of the fiscal space the authorities have to manoeuvre.
‘The six-month budget deficit was 0.5 percent of GDP, and seven-month preliminary data suggest a budget deficit of 0.27 to 0.3 percent of GDP. There is a significant fiscal space to this year’s deficit target of 2.2 percent of GDP, which will allow an increase in public investments. In the private sector, the tax break for the reinvested profit has come into effect on July 1, a measure that is supposed to boost private investments, and the minimum wage has also been supplemented, which is likely to stimulate private consumption,’ explained Liviu Voinea.