CEE Macroeconomic picture: Romania should be among the strongest growing economies in the region, while the assessment is more than attractive. Erste Group estimates indicate that agriculture could be the growth trigger.
Romanian economy increased 1.9 per cent in real terms in Q1 2013 compared to the same period of the year before, while the advance from Q4 2012 was 0.6 per cent, shows provisional data released on Thursday by the National Statistics Institute (INS), Agerpres reports.
‘The Gross Domestic Product estimated for Q1 2013 was RON 154.233 bln in current prices, according to seasonally adjusted figures, marking a 0.6 per cent advance in real terms from Q4 2012 and of 1.9 per cent from Q1 2012, respectively. Expressed as raw series, the GDP grew 2.2 per cent in Q1 compared to the same period last year, while the growth from Q4 2012 expressed as seasonally adjusted series was 0.6 per cent,’ INS said. The calculation of the revised GDP for Q1 2013 in raw and seasonally adjusted series, according to the second provisional estimate, was based on detailed administrative budget execution data and accounting data of state-owned companies reclassified into the ‘Public administration’ sector, used to work out the complete account sequence of this sector and the corrected data on imports and exports of goods and services in the balance of payments.
The National Projection Commission maintained at 1.6 per cent its estimate of the GDP growth this year, as announced in the 2013 – 2016 medium-term spring forecast. The commission advanced the same figure in its winter forecast, this March. According to the National Projection Commission, Romania’s GDP will hit RON 623.3 bln this year.
Recently, Governor of the National Bank of Romania (BNR) Mugur Isarescu said that Romania’s economic growth might exceed 1.6 per cent in 2013 provided that this is a good agricultural year. ‘We have kept the 1.5-1.6 percent projection, but our economic growth data are not the main ones. Our model, unlike the one used by the Economic Projection Commission or the Government, is targeted at inflation. All the other data are there to see how prices evolve. As a rule, I am optimistic. With a good agricultural year, I believe Romania’s economic growth will exceed 1.6 percent,’ Isarescu mentioned. Romania could have a economic growth exceeding 1 pc and can go to 1.5 pc – 1.6 pc, Adrian Vasilescu, advisor to BNR governor, also said.
According to the recent CEE Equity strategy report, Romania should be among the strongest growing economies in the region, while the valuation is more than attractive and the growth outlook confirms the sound standing. Currently, pending privatizations might have a reasonable chance to finally help break the liquidity trap. However, for most of the third quarter, liquidity might remain a show-stopper, that’s why we still tend to assign a moderate overweight for those who can deal with small sizes. Henning Esskuchen, Head of CEE Equity Research at Erste Group mentioned in the report that Romania colud have 1.8 per cent GDP growth in 2013 with upward potential to 2.2 per cent y/y in the case of a good agricultural harvest (which seems likely). “Despite the gloomy outlook in the Euro Area, some CEE countries have been gaining momentum. Hungary and Romania, the first two countries that started with tough consolidation in 2009 and the first to successfully exit the excessive deficit procedure this year can catch some breath”, foresees Esskuchen. “Besides the short-term impact on volatility, we do not expect the Fed’s decision to have an impact on real economies in CEE, as their external financing needs have declined substantially.”
INS data not to alter economic growth outlook
The changes of the GDP announced by the National Statistics Institute (INS) yesterday are marginal and only applicable to seasonally adjusted figures, ING Bank Romania senior economist Vlad Muscalu said, also noting that the published data would not alter economic growth projections.
The revision of the GDP estimated for Q1, 2013 – the second review – was based on detailed administrative date on budget executions and accounting data of public companies re-classified under the heading ‘Public administrations’ used for the preparation of the complete sequence of accounts of the sector and rectified data on the imports and exports of goods and services on the balance of payments.