Romania GDP Q4 2017

Romania

Romania: Economy decelerates in Q4, but remains buoyant

March 7, 2018

A second estimate released on 7 March by the Statistical Institute (INSSE) confirmed the economy expanded 6.9% over the same period in the previous year in the fourth quarter, moderating from the third quarter’s multi-year high of 8.8%. The economy was again supported by buoyant domestic demand, while the external sector continued to drag on growth. Q4’s reading brought full-year growth for 2017 to 7.0%, the strongest pace of expansion in nine years.

The solid fourth-quarter result came on the back of surging household spending. Private consumption increased a significant 12.7% year-on-year (Q3: +12.4% year-on-year), benefitting from an expansionary fiscal stance, strongly rising wages and tightening labor market conditions. Moreover, growth in fixed investment gained steam, increasing 12.6% from Q3’s already robust 6.2% growth, likely boosted by rising inflows of EU investment funds and the car assembly and machinery industries. Lastly, government consumption moderated to 2.1% growth in annual terms (Q3: +15.5% yoy).

Exports rose 7.7%, on the back of solid overseas demand for transport equipment, slightly down from Q3’s 8.6% expansion. Imports, driven by rising domestic demand, expanded 10.9% in Q4 (Q3: +11.1% yoy). Consequently, the external sector continued to drag on growth.

On a quarter-on-quarter basis, GDP growth adjusted for seasonal effects slowed to 0.6% in Q4, considerably down from Q3’s reading of 2.4%.

Romania’s economy grew at the fastest pace among EU countries in 2017, spurred by expansionary fiscal policies and soaring private consumption. However, the pro-cyclical fiscal stance and sizeable budget deficit risk overheating the economy and pose stability risks in case of unexpected shocks. That said, the economy should post another year of robust, albeit decelerating, growth in 2018, underpinned by favorable financing conditions, robust wage growth and rising EU funds inflows.


Romania GDP Forecast


FocusEconomics Consensus Forecast panelists expect the economy to grow 4.0% in 2018, which is unchanged from last month’s projection. For 2019, the panel expects the economy to expand 3.4%.


Author: Massimo Bassetti, Economist

Sample Report

Looking for forecasts related to GDP in Romania? Download a sample report now.

Download

Romania GDP Chart


Romania GDP Q4 2017 0

Note: Year-on-year changes of GDP in %.
Source: National Institute of Statistics and FocusEconomics Consensus Forecast.


Romania Economic News

  • Romania: Industrial output rebounds in April

    June 13, 2019

    Industrial output rose 1.4% on an annual basis in April, contrasting a 0.2% year-on-year fall in March.

    Read more

  • Romania: Inflation stable in May

    June 12, 2019

    Consumer prices increased 0.5% month-on-month in May, down from 0.6% in April.

    Read more

  • Romania: Growth jumps in Q1

    June 6, 2019

    A comprehensive estimate released by the Statistical Institute on 6 June revealed that output grew 5.0% year-on-year in the first quarter (Q4 2018: +4.1% year-on-year)—the strongest outturn in more than a year.

    Read more

  • Romania: Growth jumps in Q1

    May 29, 2019

    Romania’s economy grew 5.0% year-on-year in the first quarter, according to a preliminary estimate released by the Statistical Institute on 15 May.

    Read more

  • Romania: NBR stays put despite new hawkish tilt

    May 15, 2019

    On 15 May, the National Bank of Romania (NBR) kept the policy rate unchanged at 2.50%, while also leaving the deposit facility rate at 1.50%, the lending facility (Lombard) rate at 3.50% and maintaining the reserve requirements on both leu- and foreign currency-denominated liabilities.

    Read more

More news

Search form