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September 24, 2021
BUSINESS

Economy to contract in Q1 but will resume growth in Q2

Economic analysts and brokers state that it would not be a surprise for the Romanian economy to contract in Q1, because of the European economy’s slowdown and the unfavorable weather seen at the start of the year, but foresee a resumption of growth in Q2, Mediafax informs. Raiffeisen Bank Romania chief economist Ionut Dumitru states that the definition of technical recession, namely two consecutive quarters of economic drop, has purely statistical, not economic, basis. He foresees a drop of 0.5 – 0.7 per cent in Q1 of this year, followed by a 0.2 per cent growth in Q2. Dumitru estimates an overall economic growth of 0.5 per cent this year. Vlad Muscalu, ING Bank chief economist, states that economic activity will continue to contract in Q1, the impact induced by the external situation and the unfavorable weather overturning the positive trend that was seen at the start of the year. The ING analyst estimates an economic growth of 0.3 per cent in Q1 of 2012 compared to Q4 of 2011.  BCR analyst Eugen Sinca expects the GDP to register a slight drop in the first quarter, however he avoided any figure. He believes that in Q2 the Romanian economy could grow by 0.5 – 1 per cent compared to Q1.  On the other hand, Andrei Radulescu, SSIF Broker analyst, is the most optimistic of the analysts contacted, stating that there are equal chances for the economic to go either way in Q1, since the data for January was positive and the period of poor weather was brief. He believes that poor weather will not seriously affect the economy because the negative impact it had was repaired once economic activity returned to normal.  On the other hand, EFG Eurobank Securities transactions director Laurentiu Floroiu stated that he does not rule out the possibility that economic activity in Q2 will be affected by weather conditions.

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