Romania: Contraction in industrial production softens in March
September 3, 2014
In the second quarter, the economy expanded 1.2% over the same period last year, according to more detailed data released on 3 September. The figure met the preliminary estimate and marked the slowest expansion since Q4 2012. Q2’s expansion was a deceleration from the 3.8% increase recorded in the first quarter.
Q2’s result came on the back of a slowdown in domestic demand and weaker exports growth. Private consumption grew 2.9% in the second quarter, which was well below the 6.7% increase recorded in the first quarter. In addition, government spending decelerated from a 1.1% increase in Q1 to a meager 0.1% rise in Q2. Conversely, fixed investment contracted 3.0% in Q2, which was a slower decrease compared to the 7.8% fall observed in Q1.
On the external side of the economy, exports decelerated from a 9.7% rise in Q2 to a 4.7% rise in Q1. In addition, imports rose only 3.8% in the second quarter (Q1: +8.5% year-on-year). As a result, exports and imports recorded the slowest growth rates in six and four quarters, respectively. The external sector’s net contribution to overall economic growth rose from minus 1.4 percentage points in Q1 to minus 0.8 percentage points in Q2.
On a quarter-on-quarter basis, GDP fell 1.0% in seasonally-adjusted terms in Q2, which met the preliminary estimate but undershot the 0.2% contraction observed in Q1.
Author: Dirina Mançellari, Senior Economist