Romanian Economic Growth Unexpectedly Slows on Weaker Industry

Romania’s economic expansion unexpectedly slowed in the second quarter as stronger consumption failed to offset a slowdown in industry and exports.

Gross domestic product increased a preliminary 3.2 percent from a year earlier, compared with a 4.3 percent gain in the first three months, the National Statistics Institute in Bucharest said Friday by e-mail. That’s worse than the median 4.8 percent forecast of seven economists surveyed by Bloomberg. GDP rose a seasonally adjusted 0.1 percent from the previous quarter.

“Both industry and exports had a weak performance in the second quarter,” Raiffeisen Bank Romania SA economists Ionut Dumitru and Nicolae Covrig said in an e-mailed note before the data release. “The advance should have been driven mainly by private consumption and services.”

The government is trimming sales taxes and raising public wages before elections next year. Prime Minister Victor Ponta, battling corruption charges, plans to loosen fiscal policy further, drawing rebukes from the central bank, the International Monetary Fund and the European Union.

The leu weakened 0.4 percent to 4.4130 against the euro as of 8:50 a.m. in Bucharest, data compiled by Bloomberg showed. The currency has appreciated 1.5 percent this year.

Full second-quarter GDP data will be released Sept. 4.

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