Romanian GDP Growth Quickens More Than Expected After Tax Cutsby and
GDP rose 4.3% compared with 3.9% median estimate in survey
Growth underpinned by private consumption after fiscal easing
Romania’s economic growth accelerated in the first quarter more than estimated as tax cuts and wage increases buoyed consumers.
Gross domestic product rose by a preliminary 4.3 percent from a year earlier, compared with a 3.8 percent gain in the previous three months, the National Statistics Institute said Friday. That’s more than the 3.9 percent median estimate of 11 economists in a Bloomberg survey. GDP grew a seasonally adjusted 1.6 percent from the fourth quarter.
“Domestic demand is likely to remain the main driver of growth, supported by a positive fiscal impulse as well as accommodative financial conditions,” Andrew Matheny, a London-based economist at Goldman Sachs Group Inc., said in an e-mailed note before the data were released.
With the economy already among the EU’s fastest-growing, Romania has implemented tax cuts and state-wage increases before elections later this year. The European Commission predicts GDP will expand at the bloc’s second-fastest pace in 2016, behind Ireland. Central bank Governor Mugur Isarescu has warned growth may slow because of a mortgage walk-away law that risks curbing lending.
The leu is this year’s fifth-best performer against the euro among 24 emerging-market currencies tracked by Bloomberg, gaining 0.6 percent. It was little changed at 4.4974 per euro at 9 a.m. in Bucharest. Full GDP figures are due June 7.