Romania: Economic growth speeds up in Q3, but downward revisions take the shine off the H1 performance
According to a preliminary estimate, growth picked up in the third quarter, with GDP expanding 4.7% on an annual basis (Q2: +3.9% year on year). Q3’s reading marked the strongest growth since Q3 2021. Available data suggests that the breakdown due on 7 December is likely to show an improvement in the manufacturing sector and a slowdown in private consumption.
It should also be noted that significant downward revisions were made to previous quarters as a result of recent methodological changes. These revisions brought Q1 and Q2s growth closer to what analysts had initially expected and paint a less positive picture of the first half of the year.
On a seasonally-adjusted quarter-on-quarter basis, economic growth was steady at 1.3% in Q3.
Commenting on the reading and the outlook, Nicolaie Alexandru-Chidesciuc from JPMorgan commented:
“Despite the positive surprise in 3Q22, significant revisions to the historical GDP series mean we revise 2022 GDP growth lower, to 5% from 6.5% previously. […] Unlike the NBR [National Bank of Romania], we do not envisage a negative output gap late in 2023 or even in 2024 as we see growth remaining rather robust because of EU funds which are double in real terms relative to prior years.”