Romania’s economic contraction in Q2, slightly softer than initially reported

Romania's GDP contracted by only 11.9% in the second quarter of the year (Q2) compared to the previous quarter (Q1), in seasonally adjusted, real terms, under the revised data published by the National Statistics Institute (INS).

The INS initially reported a quarterly plunge of 12.5% in Q2.

Meanwhile, the statistics institute also revised the quarterly growth in Q1 from 0.3% to 0% - meaning that Romania's economy stagnated in Q1 compared to the last quarter of 2019.

In annual terms, INS revised the economic drop for Q2 from 10.5% to a softer 10.2%.

Still, it also reviewed the yearly growth for Q1 from 2.7% to 2.5%. Finance minister Florin Citu hailed the Q2 GDP revised data reassuring the economy would recover under a V-shaped trajectory.

According to minister Citu, "the most important good news comes from investment and net exports."

"Investments had a positive contribution of 0.5pp during the crisis period (revised from 0.4pp points). It is obvious that the strategy to channel as many resources as possible to investments, RON 30 billion in nine months - the highest amount in the last ten years - worked. In terms of net exports, the negative contribution was revised to 0.4 pp, leading to a much lower negative impact on GDP. I support the baseline scenario with a V-shaped recovery of the economy in the third quarter of 2020," the finance minister also wrote in his Facebook post.

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