Romania: GDP drops at notably softer pace in Q4, beating market expectations
GDP shrank 1.5% in year-on-year terms in the final quarter of 2020, dropping at a markedly softer pace than Q3’s 5.7% slide, a flash estimate showed. The reading surprised on the upside, beating market expectations of a stronger downturn.
Meanwhile, on a seasonally-adjusted quarter-on-quarter basis, economic activity grew a solid 5.3% in Q4 (Q3 2020: +6.1% s.a. qoq).
Comprehensive national accounts data for the fourth quarter will be released on 9 March.
Commenting on the outlook ahead, Valentin Tataru, chief Romania economist at ING said:
“Due to the significant carryover effect created by this fourth quarter growth, the outlook for 2021 GDP is definitely shaping up to be much better than before. Looking beyond statistical effects, we believe that there are good prospects to see the economy back to pre-crisis levels as early as the third quarter of 2021. Of course, a lot depends on the epidemiological developments and the vaccination pace which, of late, seems to be going in the right direction. […] For now, the strong carryover is enough to make us revise our 3.7% estimate for 2021 growth to 5.5% while maintaining 2022 at 5.0%.”