Romania: Economic growth slows more than expected in Q2
According to a preliminary estimate, growth slowed in the second quarter, coming in at 1.1% on an annual basis (Q1: +2.4% yoy), undershooting market expectations. A full breakdown will not be available until 7 September. Weaker retail sales activity likely signaled subdued private consumption, despite above-inflation wage growth over the quarter. Moreover, slower merchandise exports growth points to weakening external demand.
On a seasonally adjusted quarter-on-quarter basis, the economy expanded 0.9% in Q2 (Q1: +0.5% qoq s.a.).
Commenting on the outlook, Dorina Ilasco from Erste Group commented:
“Household consumption should remain the main contributor to growth, but it should add less relative to 2022. Investments are also expected to support GDP growth this year, since EU funds inflows from both the Multiannual Financial Framework and Next Generation EU could climb to 4.0-5.0% of GDP in 2023 vs. 3.5% of GDP in 2022.”