Banks’ analysts revise downward their 2024 RO GDP projections to around 2%

BCR, part of Erste Bank Group, and ING Romania revised their projections for this year’s economic growth to 2.0% (from 2.8% previously), while BRD SocGen admits its 3.4% projection is put at risk by the Q2 GDP flash estimate.

Romania’s statistics office INS on August 14 announced 0.8% y/y GDP growth for Q2, in contrast to higher expectations revealed by a +2.8% consensus announced by a Bloomberg/Reuters survey.

Both BCR and ING call for caution ahead of possible further revisions, while BRD expects more clarity from the more granular first estimate of the Q2 GDP.

Most of the analysts pointed to the striking discrepancy between the optimistic expectations of the National Bank of Romania (BNR), included in the press release issued along with its rate cut decisions of July and August, and the statistics office’s flash estimate.

“The latest data and analyses point to a somewhat more robust quarter-on-quarter economic growth in the 2024 Q2 than previously anticipated, implying a marked step-up in the annual GDP dynamics,” the central bank’s press releases read.

BNR may react with further rate cuts, analysts pointed out.

BRD cautions on the complications slower economic growth may create at the moment the Government is expected to design the fiscal consolidation strategy.

“The GDP underperforming has an all the more bitter taste as the growth equation for next year was already a complex one, the main factor of uncertainty being represented by the instruments and dosage of the post-election fiscal consolidation,” BRD’s comment reads.

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