Romanian Economy Advances at Fastest Since 2008, Beats Estimatesby and
GDP advanced 6% compared with 4.1% median estimate in survey
Pre-election tax cuts have boosted consumption in past year
Romanian economic growth advanced at the fastest pace since 2008, exceeding analysts’ estimates, supported by a booming consumption amid tax cuts and wage increases.
Second-quarter gross domestic product gained a preliminary 6 percent from a year earlier, compared with a 4.3 percent gain in the previous three months, the National Statistics Institute said Friday. That’s more than the 4.1 percent median estimate of nine economists in a Bloomberg survey. GDP grew a seasonally adjusted 1.5 percent from the first quarter.
“The advance should have been driven by private consumption,” Nicolae Covrig, a Bucharest-based economist at Raiffeisen Bank Romania SA, said in a note before the data were published. “The performance of industry should have remained weak in the second quarter,” while “net exports might have had a negative contribution.”
With the economy already among the EU’s fastest-growing, Romanian citizens are reaping the benefits of tax cuts and state-wage increases approved by lawmakers to lure voters before a general election later this year. While the European Commission predicts GDP will expand at the bloc’s second-quickest pace in 2016, behind Ireland, it warns that fiscal loosening may endanger next year’s budget targets.
The leu is this year’s third-best performer against the euro among central and eastern European currencies tracked by Bloomberg, gaining 1.4 percent. It was little changed at at 4.4580 against the euro at 8:45 a.m. in Bucharest. Full GDP figures are due Sept. 6.