Romania’s economy grew at a real rate of 4.1% in 2018 versus 2017, a significantly slower pace than in 2017 (7.0%), according to data released on Thursday (February 14), by the National Statistics Institute (INS). The result is lower than what analysts and local officials had predicted.
“The 2018 slowdown from 7.0% in 2017 was sharper than our initial forecast of 4.7% and the official (Government – e.n.) projection of 6.1% at the start of the year. And the weakness is set to continue in 2019. We estimate 2.7% GDP growth while the official forecast sees an acceleration to 5.5%,” ING Bank economists said in a note.
"A deterioration in consumer sentiment, weak demand from the main export markets and fiscal uncertainty at home are likely to prove a significant drag on first-quarter GDP growth. The picture for the full year doesn’t look much rosier: consumers are running out of confidence while businesses are facing higher fixed costs and higher financing costs as well as labor shortages and a volatile investment environment. Meanwhile, supply-side structural reforms are missing or even being rolled back," they added.
In the fourth quarter of 2018, the economic growth rate was also 4.1% (as a gross series) compared to the same quarter of 2017. In seasonally adjusted terms, the growth rate was 4.0%.
Romania thus had the fourth-highest economic year-on-year growth rate in the European Union (EU) in the fourth quarter of 2018, after Latvia (5.5%), Hungary (4.8%) and Poland (4.6%), and on par with Portugal (4.0%).
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