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March 4, 2021

Analysts estimate economy dropped 2 – 4.1 pc in Q1, possibly in technical recession

The GDP dropped in Q1 by 2 – 4.1 per cent vs. the same period of 2008, the economic analysts estimate, some of them considering that the economy may have entered technical recession according to the evolution from the first three months, Mediafax informs.

The six economists interviewed by Mediafax have estimates regarding GDP contraction in Q1 with annual installments between 2 and 4.1 per cent, but most of them predict a fall of 2.5 per cent. The average of the estimates of the analysts represents a reduction of GDP of 2.9 per cent. Moreover, three of the economists showed that Romania may have entered technical recession after Q1. The technical recession is defined as the fall of GDP in two consecutive quarters, in comparison with the previous quarters.

ING Bank Romania economist, Nicolaie Chidesciuc, the chief economist of BRD, Florian Libocor, and the general director of the independent institute of macroeconomic predictions MacroAnalitica, Laurian Lungu, estimate that the economy has decreased by 2.5 per cent in Q1 against the same period of 2008. “It is beyond any doubt that the biggest fall was registered in industry, I think that over 10 per cent. Probably that the services will shift slightly negatively in the territory, while the constructions are on plus. Agriculture was the most probably on plus,” Chidesciuc said. He estimates that the economy has registered in Q1 a contraction around 2 per cent vs. the last three months of 2008, after it dropped around 3 per cent in the last quarter. “For this year I anticipate the continuation of the economic contraction until the third quarter and a slight revival in the last three months. For the fourth quarter I predict a fall of GDP of 1.3 per cent, while for 2009 a contraction of the economy of 3.5 per cent,” ING Bank Romania economist added.

Libocor also considers that the evolution from the first quarter is the expression of the deterioration of the dynamics of the activities developed in most sectors of the economy.

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