Romania’s economic expansion slowed in the second quarter, probably prompted by a setback in industry and export growth.
Gross domestic product increased 1.2 percent from a year earlier, compared with 3.9 percent in the first quarter and 5.4 percent in the fourth quarter of last year, according to a preliminary estimate today, the Bucharest-based National Statistics Institute said in an e-mail. The median forecast of eight economists surveyed by Bloomberg was for a 3.3 percent expansion. GDP fell a seasonally adjusted 1 percent from the previous three months.
“The performance of exports and industry has deteriorated in the second quarter, while domestic demand also showed signs of weakness,” analysts at Raiffeisen Bank Romania SA, including Nicolae Covrig, wrote before the report. “We expect economic activity to remain on an upward trend in the third quarter.”
The European Union’s second-poorest member is counting mostly on car exports from Renault SA and Ford Motor Co. to boost growth, increase living standards and help the government meet its goal of joining the euro area in 2019. Escalating sanctions against Russia and economic retaliation from President Vladimir Putin are set to weigh on growth in the EU’s eastern members.
The growth slowdown poses no threat to the government’s annual economic expansion target of 2.8 percent as Romania has room to boost state spending, Budget Minister Liviu Voinea said, as cited by business daily Ziarul Financiar.
The leu weakened 0.1 to 4.4388 against the euro at 11:41 a.m. in Bucharest, while the yield on the benchmark euro-denominated 10-year bond was little changed 3.06 percent.
Industrial production increased a seasonally adjusted 11.5 percent in July from a year ago, compared with 13.3 percent in June. Retail sales advanced 10 percent in the same month. A detailed breakdown of second-quarter GDP will be released Sept. 3, according to a calendar on the institute’s website.