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Romania GDP Q4 2021

Romania: GDP growth records slowest increase since Q1 2021 in the fourth quarter

GDP growth slowed markedly to 2.4% year-on-year in the fourth quarter, from 6.9% in the third quarter. While Q4’s reading was the weakest result since Q1, it still placed GDP growth for 2021 as a whole at 6.0%, marking a sharp rebound from 2020’s 3.8% decline. Meanwhile, on a seasonally-adjusted quarter-on-quarter basis, economic activity dropped 0.1% in Q4, contrasting the previous quarter’s 0.4% growth. Q4’s reading marked the first decline since Q2 2020.

Domestically, private consumption growth was stable at 9.1% year-on-year in Q4. Meanwhile, government consumption dropped at a milder rate of 0.4% in Q4 (Q3: -2.4% yoy), and fixed investment declined at a more moderate rate of 0.2% in Q4, from the 1.4% contraction recorded in the prior quarter.

On the external front, exports of goods and services increased 2.9% on an annual basis in the fourth quarter, which was below the third quarter’s 7.3% expansion. In addition, imports of goods and services growth waned to 5.3% in Q4 (Q3: +11.2% yoy).

Commenting on the outlook, Ciprian Dascalu, analyst at Erste Bank, said:

“We expect sequential growth rates for the first two quarters of 2022 significantly weaker than before the outbreak of the war in Ukraine, with first quarter likely to post a negative growth relative to Q4 2021 which should translate into a technical recession if no data revisions. The economy should recover sharply in the second half of the year, assuming a de-escalation of the conflict.”

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