Romania: GDP growth moderates but beats expectations again in Q2
According to a preliminary reading, GDP growth slowed to 5.3% year on year in the second quarter, from 6.4% in the first quarter. As in Q1, the reading was much higher than analysts had expected. As retail sales continued to expand at a healthy pace in the quarter, the full GDP breakdown due on 7 September is likely to show a strong performance of services. Romania has been the best-performing large economy in Central and Eastern Europe since the pandemic hit.
On a seasonally-adjusted quarter-on-quarter basis, economic growth slowed notably to 2.1% in Q2, from the previous quarter’s 5.1% expansion.
Commenting on the release and the outlook ahead, Nicolaie Chidesciuc from JPMorgan commented:
“We see the strong GDP prints in 1H22 as a process of normalization, mainly in services, after 2H21 saw a large negative impact due to the serious political crisis which ran concurrently with the most acute phase of the COVID-19 pandemic in Romania. […] Romania’s growth performance is likely to remain robust, but we are revising the quarterly growth profile lower. The biggest revision is to 3Q22 and it is driven by two factors: we expect some payback after strong growth in 1H22 and, in addition, there are indications of a significant drop in agricultural output.”