Romania: Economy expands on the back of strong domestic demand
December 6, 2011
In the third quarter, GDP rose 4.4% over the same period last year, according to revised data from 6 December. The print was in line with the flash estimate released on 15 November and marked the fastest pace of expansion since Q3 2008. Moreover, the reading represents a significant improvement compared to the 1.4% expansion recorded in the second quarter amid improving domestic demand. Private consumption jumped 3.1% over the same period last year (Q2: -0.7% yoy), and gross fixed investment surged 11.4%, which contrasted the 1.4% fall in the previous quarter. Meanwhile, government expenditure fell 0.4% (Q2: -1.2% yoy). The external sector's contribution to overall economic growth remained virtually unchanged, as exports of goods and services accelerated to a 8.9% expansion in the third quarter (Q2: +6.3% yoy), whereas imports grew a faster 10.5% (Q2: +7.7% yoy). A quarter-on-quarter comparison corroborates the improvement shown in annual figures, as GDP expanded 1.8% in seasonally adjusted terms in the third quarter, well above the 0.9% expansion tallied in the second quarter. At a sector level, the expansion reflected improving industrial production and a bumper harvest. The agriculture sector surged 22.1% over the same period last year (Q2: +3.4% yoy) and the industrial sector expanded a strong 5.9%, following a 4.9% expansion in the previous quarter. The services sector, though, grew a softer 1.2%, contrasting the 0.4% contraction in the previous quarter.