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March 2, 2021

Net investments fall by 9.1 pc in Q2 and H1

Net investments in Romania’s economy have fallen by 9.1 percent both in the second quarter and in the first half of this year, when compared to the similar periods in 2013, according to the National Statistics Institute (INS) data, released yesterday.
Investments for new construction works totaled RON 11.19 billion (some EUR 2.5 billion) in the first half of this year, representing 44.4 percent of the total, slightly up from 40 percent in the same period the previous year. Investments in equipment, which also include means of transportation, totaled RON 11.15 billion (EUR 2.5 billion) and represented 44.3 percent of the total.
In the second quarter of this year, compared to the same period in 2013, net investments in the economy dropped by 9.1 percent, a decline recorded in equipment (including means of transportation) – down 16.1 percent and new construction works – down 7.5 percent, according to INS.
Agriculture and constructions put a brake on economic growth in Q2 as well as in the first six months of the year, period for which INS calculated a GDP of RON 279,352.8 M, Up by 2.4 percent, evolution that was supported by the industry (+1.4 pc) and net taxes (+0.8 percent). The seasonally adjusted GDP estimated for Q2 was 163,008.5 M current prices, down by 1 percent in real terms compared to Q1 and up 1.5 percent compared to the relevant period last year. A contribution to the GDP rise in the first half of the year was brought by the industry (+1.4 percent), with a share of 31.4 percent in the formation of the GDP and with a 4.6 percent higher volume of activity, and information and communications (+0.3 percent), with a share of 4.1 percent in the formation of the GDP and with a 8.7 percent higher volume of activity, INS states in a press release. A notable positive contribution came from the net per-product taxes (+0.8 percent), with a weight in the formation of the GDP or 13.4 percent and with 6.2 percent higher volume.
The reduction of the volume of work in the sector of constructions by 3.6 percent had a negative impact on the evolution of the GDP, with a contribution to the GDP growth of -0.2 percent. Agriculture, silviculture and fishing also had a negative contribution to the GDP growth (-0.1 percent) following the decrease by 4.8 percent of the volume of activity. From the point of view of the GDP utilization, the most important contributions to the GDP growth in the first six months of the year came from the expenditures with the final population household consumption (+3.3 percent), with a weight of 65.6 percent in the GDP utilization and with a 5.1 percent higher volume and net export (+1.0 percent), a consequence of the 12.8 percent rise of the export of goods and services, correlated with the lower growth of the volume of the import of goods and services, by 10.6 percent. Following the significant decrease of the volume of the gross fixed capital formation by 11.2 percent, it had a negative contribution to the GDP growth, by -2.2 percent. INS revised downward Q1 GDP estimations from a growth by 0.2 percent compared to the previous quarter to a decrease by 0.2 percent. Romania is therefore in technical recession, already with two consecutive quarters of GDP contraction. According to Eurostat data, Romania posted the most important economic decrease in the EU 28 in the second quarter of the year, of -1 percent.

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