Romania revises up its Q1 GDP, annual growth lifted from 0.1% to 0.5% y/y

Romania’s statistics office INS revised upwards the first quarter’s (Q1) nominal GDP by 2.0% to RON 424.6 billion (EUR 85.3 billion) under the second preliminary estimates published on July 8.

The revised data does not imply significant adjustments in the dynamics of the economy, with core sectors of industry and construction expected to make a more consistent contribution to the year’s economic growth (seen broadly above 2% y/y, possibly above 2.5% in 2024) in the rest of the year.

The central bank, in its July 5 monetary board decision, already heralded “better than expected” economic growth in Q2.

The revaluation indicates Romania’s GDP expressed in real terms reached a new maximum in Q1, after the first estimate published on June 7 put the quarter’s GDP below that achieved in Q3 last year.

The annual increase in real terms (comparable prices) was revised up from a mere 0.1% y/y to a more substantial 0.5% y/y.

The quarterly growth rate of the seasonally (and workday) adjusted GDP also expressed in real terms was revised as well from 0.4% q/q to 0.7% q/q.

On the production side, a significant revision was operated on the volume of services delivered to households, which increased by 0.4% under the revised data compared to a 1.7% y/y decline under the previous estimates.

The sole other significant contributor to annual growth, on the production side, remains the sector of IT&C (+1.9% y/y value added generated).

The volume of net taxes increased by 6.2% y/y (not much changed from +6.0% y/y under the June 7 estimate), making a significant 0.5pp contribution to the annual advance of the quarter’s GDP.

On the utilisation side, the real (comparable prices) consumption was revised at an annual decline of -0.9% y/y from -0.1% y/y decline previously estimated, mainly because of the government’s consumption (-12.6% y/y from -2.9% previously).

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