Romania: GDP growth slows in the third quarter
A second release revealed that GDP growth moderated to 7.4% year-on-year in the third quarter from 13.9% in the second quarter. That said, the reading came in above the flash estimate of a 7.2% increase.
The slowdown was broad-based, with private consumption, public spending, fixed investment and exports all weakening. Household spending increased 9.3% in annual terms in the third quarter, which was below the second quarter’s 11.8% expansion. Public spending growth moderated to 0.3% in Q3 (Q2: +2.3% yoy), while fixed investment fell at the steepest rate in over two years, contracting 0.4% (Q2: +12.6% yoy).
Meanwhile, exports of goods and services increased 6.1% on an annual basis in the third quarter, which was below the second quarter’s 42.3% expansion. In addition, growth in imports of goods and services moderated to 9.3% in Q3 (Q2: +42.1% yoy).
On a seasonally-adjusted quarter-on-quarter basis, economic growth lost momentum in Q3, cooling to 0.3% (flash estimate: +0.4% s.a. qoq), following the previous quarter’s 1.5% expansion. Q3’s reading marked the slowest growth rate since Q2 2020.
Commenting on the outlook, Ciprian Dascalu, analyst at Erste Bank, said:
“We keep GDP growth forecasts unchanged at +6.4% in 2021 and +4.0% in 2022, with downside risk for the latter as carry-over effect from the fourth quarter of this year is likely to weigh with the economy going through a soft patch.”