Gross fix capital formation drives Romania’s GDP growth to 4% YoY in Q3

Romania’s GDP increased by 4.0% YoY in Q3, the statistics office INS confirmed on December 7.

The GDP over the past four quarters reached EUR 275 bln, up from EUR 261 bln calculated at the end of June, which is likely to sweeten the current account and public debt-to-GDP ratios.

The gross fix capital formation increased by 13.0% YoY in Q3 and contributed 3.8pp to the 4% YoY GDP growth in Q4 – twice as much as the private consumption (-1.9pp contribution), which advanced by only 3.2% YoY, according to the detailed quarterly GDP data published by the statistics office INS.

The third essential element in terms of GDP utilisation was the external demand, where the imports surged by 17.2% YoY, and the exports advanced by only 13.3% YoY – resulting in a negative 2.5pp contribution to the GDP growth. The net imports accounted for 7.4% of the domestic demand (for consumption and investments), the highest share since Q2, 2010.

Regarding the formation of the GDP, the services sector was the most substantial single contributor to the growth (+5.1pp).

Notably, the value added generated by the IT&C industry rose by 20% YoY, the real estate sector generated 13% YoY more value-added, while the retail and wholesale trade generated only 5% more value-added – the weakest annual performance since the Covid year 2020. The sector accounted for only 0.8pp of the 5.1pp overall contribution of the sector of services to the 4% GDP growth in Q3.

The sectors of industry and particularly agriculture particularly made negative contributions, while the sector of construction made a small positive contribution to the annual increase of Romania’s GDP in Q3.

(Photo source: Oleg Kachura/Dreamstime.com)