Romania: Economy benefits from strong restocking process, grows at fastest pace in over five years
March 5, 2014
In the last quarter of 2013, the economy expanded 5.2% over the same period of the previous year, according to more detailed data released on 5 March. The figure was on par with the preliminary estimate and marked the largest expansion since Q3 2008. Q4's expansion marked an improvement over the 4.2% increase recorded in the previous quarter. In the full year 2013, the economy grew 3.5%, which was well above the 0.5% expansion recorded in 2012. Q4's result came on the back of stronger domestic demand. Private consumption grew 3.2% over the same quarter of the previous year (Q3: +1.9% quarter-on-quarter), while government consumption fell 7.1% (Q3: -6.9% qoq). Fixed investment fell 10.8% (Q3: -2.1% qoq). Total investment, however, benefited from a strong restocking process and grew 5.2% in Q4, which was up from the 4.2% rise recorded in the previous quarter. On the external side of the economy, exports decelerated from a 20.3% increase in Q3 to a 13.7% increase in Q4. In addition, imports rose 4.6%, which was down from the 8.0% rise recorded in the third quarter. As a result, the external sector's net contribution to overall economic growth inched down from 3.3 percentage points in Q3 to 3.2 percentage points in Q4. On a quarter-on-quarter basis, GDP rose 1.5% in seasonally-adjusted terms in Q4, which undershot both the 1.7% that had previously been estimated and the 1.8% expansion observed in Q3. The government expects GDP to expand 2.2% in 2014. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.5% in 2014, which is unchanged over the previous month's projection. For 2015, the panel expects the economy to expand 2.9%.
Author: Dirina Mançellari, Senior Economist