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Romanian GDP Grows at Fastest Pace in Two Years on Harvest

Nov. 14 (Bloomberg) -- Romania’s economy grew at the fastest pace in two years in the third quarter, beating economists’ estimates, probably spurred by a bumper harvest and export growth.

Gross domestic product increased 4.1 percent from a year earlier, compared with 1.5 percent in the second quarter, according to a preliminary estimate released by the National Statistics Institute in Bucharest today by e-mail. The median forecast of nine economists surveyed by Bloomberg was for a 3.5 percent expansion. GDP rose a seasonally adjusted 1.6 percent from the previous three months.

Economic growth quickened in the EU’s second-poorest member as favorable weather conditions boosted output in agriculture. Demand for Romanian-made goods abroad, such as cars by Renault SA’s Dacia unit and Ford Motor Co., also increased after the euro region, the country’s main trading partner, exited a recession.

“We expect agriculture to have been the main driver of growth on the supply side, with double-digit yearly growth,” Anca Maria Aron, a Bucharest-based economist at UniCredit Tiriac Bank SA, wrote in a note today. “Nevertheless, we expect the impact of agriculture in fourth-quarter growth to be much smaller.”

The leu rose 0.3 percent to 4.4520 against the euro at 3:32 p.m. in Bucharest, according to data compiled by Bloomberg. The yield on Romania’s 2020 euro-denominated bonds fell 14 basis points, or 0.14 percentage point, to 4.08 percent the lowest in a week. The benchmark BET stock index gained 0.6 percent to 6,107.25.

Winter Wheat

Romania’s winter wheat crop this year jumped 37 percent to 7.296 million metric tons from last year, barley climbed 53 percent and rapeseed increased fourfold, the U.S. Department of Agriculture’s Foreign Agricultural Service said, citing data from the Romanian government.

Last month the government, in agreement with the International Monetary Fund and the European Union, increased its 2013 economic-growth forecast to 2.2 percent from 1.9 percent, citing a good harvest and a pickup in exports.

“It’s important to maintain this growth pace,” Prime Minister Victor Ponta said in a televised speech in Bucharest today. “The main drivers of growth were industrial output, exports” and development aid from the European Union.

Second Fastest

Romania’s expansion was the second fastest behind Latvia among the EU’s nine eastern members that have reported third-quarter data. Slovenia, whose GDP contracted 1.7 percent in the second quarter, will release figures for the July-September period Nov. 29.

Hungary’s economic growth accelerated to 1.7 percent in the third quarter from a year earlier, more than analysts forecast. Poland’s GDP grew 1.9 percent, also beating estimates. The Czech economy unexpectedly shrank last quarter, with GDP declining 1.6 percent from a year earlier.

“The major positive surprises came in Romania and Hungary, where both GDP growths were significantly higher than expectations,” William Jackson, an emerging-markets economist at Capital Economics Ltd. in London, wrote in an e-mailed note. “Our best guess is that a rebound in agricultural production was a key factor behind the sharp pick-up in growth.”

Industrial production increased a seasonally adjusted 7.1 percent from a year earlier in September, the institute said on Nov. 8. The country’s trade deficit shrank to 413 million euros ($556 million) in September, as exports grew faster than imports, the institute said on Nov. 11. Retail sales decreased 0.8 percent in September, it said on Nov 4.

The statistics institute will release a breakdown of third-quarter GDP on Dec. 4, according to a calendar on its website.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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