Romania revises nominal Q2 GDP by 3% upwards

Romania’s statistics office INS revised Q2 GDP upwards by 3% to RON 421 bln (EUR 84.6 bln) under the second preliminary estimate. It improved only marginally the annual growth rate for the quarter, from 0.8% y/y to 0.9% y/y.

Consequently, the growth rate for the entire H1 was maintained at 0.7% (+1.4% y/y if adjusted for the number of workdays).

The GDP deflator for the quarter was revised upwards from 8.5% y/y to 11.6% y/y, which explains most of the 3.0% upward revision of the nominal GDP.

Higher nominal GDP bodes well for the deficit ratios, and the government is currently striving to meet the 6.9%-of-GDP target. A 3% larger nominal GDP for the entire year, compared to the initial projection, would allow a supplementary deficit of 0.2% of GDP.

There were no major changes in the structure of the GDP dynamics for Q2.

The revised seasonal adjustment slightly changed the real GDP trajectory, showing that Romania’s economy peaked in Q4 last year to recover slightly (+0.3% q/q, revised from +0.1% q/q) in Q2 this year.

The high base effects created by the comparatively stronger economic activity in H2 last year put a question mark on the expected economic recovery in the second part of this year above the level of 1% (after 0.7% y/y in H1).

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