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October 27, 2020

INS confirms 0.2 pc GDP nine-month growth estimate

Agriculture and export pulled down economic growth this year. However, the activities that supported the feeble upward trend were in the science, technical and real estate areas.

The National Statistical Institute (INS) has conformed the 0.2 per cent GDP growth in the first nine months of the year, announced back in November, the evolution being supported by growth in professional, scientific and technical activities, administrative or support services and real estate. The agriculture and declining export had a negative influence on the GDP. The gross series GDP estimated for the first three quarters was RON 416.268 bn current prices, up by 0.2 per cent in real terms compared to the first nine months in 2011. The most important reductions of the volume of activity were recorded in agriculture, forestry and fishing (by 20.4 per cent) and public administration and defence, public social security, education, health and social welfare (by 2.6 per cent). The total final consumption decreased by 0.1 per cent in the first nine months compared to the corresponding period of 2011, mainly because of the decrease by 2 per cent of the public administration final consumption expenditure. The households’ final consumption expenditure went up by 0.3 per cent. The gross fixed capital formation recorded a significant rise by 12.1 per cent. In Q3, the GDP dropped by 0.6 per cent compared to the relevant 2011 interval and by 0.5 per cent since the previous quarter, leading to a nine-month economic growth by 0.2 per cent, which suggests stagnation or even recession risk for 2012. The Q 3 estimated GDP was RON 168.54 bn current prices. In the branch ‘Professional, scientific and technical activities, administrative services and supports services’ the biggest rise of the volume of activity was reported (13.8 per cent), followed by property transactions (10.4 per cent) and performances, cultural and recreational activities, home appliance repairs and other service (8.1 per cent). A slight growth of the volume of activity was recorded by information and communications activities (4.1 per cent), retail and wholesale, motor-vehicle and motorbike repairs, transport and warehousing, hotels and restaurants (2.87 per cent), Mediafax reports.The steepest reduction of the volume of activity was recorded in agriculture, forestry and fishing (29.8 per cent). Other reductions of activity were recorded in the public administration and defence, public social security, education, healthcare and social work (1.3 per cent), constructions (0.7 per cent), industry (0.3 per cent) financial brokerage and insurance (0.1 per cent). From the point of view of the use of the GDP, in Q3 2012, the domestic demand went up by 0.1 per cent since the same period of 2011, especially because of the significant rise of the gross fixed capital formation, by 9.9 per cent. Total final consumption reduced by 1.6 per cent from the lower volume of household final consumption expenditure (1.4 per cent) and public administration final consumption expenditure (2.4 per cent). A negative effect on the GDP came from the net export evolution following the more accentuated reduction of the volume of the export of goods and services (4.2 per cent) compared to the volume of import (1.9 per cent), INS notes. In Q3, the GDP suffered a seasonally adjusted decrease to RON 153.008 bn.

CR: Decreasing external demand and drought – severe impact

The decrease of foreign demand addressed to Romanian industry and the bad summer drought severely influenced Q3 economic growth, reads a note from the BCR Research Department, according to Hotnews.ro. ‘Household consumption went up by 0.8 per cent, supported by the higher salaries in the public sector. Investment went up by 1.8 per cent and the net export had a negative contribution to the economic growth,’ reads the note. BCR officials further say economic growth will go up to 1.1 per cent in 2013 from an estimated zero per cent in 2012. Household consumption will be a key-element in 2013 and BNR will try to balance the need to support credit in national currency with rising inflationist pressures. ‘We expect a rise of five-year maturity bond yields to 6.8 per cent up until March 2013 following the parliamentary election and inflationist pressures. The key-interest could be kept at 5.25 per cent throughout 2013 and ROBOR 3M will stay at 6-6.1 per cent in H1 2013, because BNR will continue to contain liquidity given to banks by its own operations on the monetary market,’ the document further notes.

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