Strong economic growth in Q3: 91%. Slowdown expected for Q4 and 2009

Economic growth was fuelled by agriculture

Romania’s Gross Domestic Product rose 9.1% in third quarter this year, up to 139.4 billion lei (38.9 billion euros), which topped analysts’ expectations by a narrow margin, while nine-month economic advance was 8.9%, according to INS’ latter statistic report.

All in all, specialists are still pessimistic on the economic growth for the end of this year, and beginning of 2009, in the context of financial crisis.

In the first nine months this year, Romania GDP was 335.2 billion lei, equivalent of 92.1 billion euros.

“Romania’s third-quarter economic growth was supported by the outstanding evolution of agriculture this summer, as this sector reaches a 12% share of GDP in third quarter. Construction sector has also reported positive results in July-September interval, without being influenced at that time by the international crisis that broke out in mid September,” Florin Eugen Sinca, financial analyst at Banca Comerciala Romana told Wall-Street.

Substantial deceleration in industry

Raiffeisen Bank analysts warned the substantial slowdown in the uses sector, the “domestic demand accelerated fuelled by the household consumption (probably linked to the pick-up in the self-consumption related to the agricultural output).

“Also, investments decelerated mainly probably due to the slowdown in construction sector, but remained at a very high rate of growth”, reads the analysis report on Q3 economic growth remitted by RZB.

Analysts expected the economic growth in third quarter to be around 8.2% and 9%, again supported by construction and services, while for the industry sector, the analysts estimated that a deceleration trend would shape.

“Industry sector will slowdown in the fourth quarter, supported by a reduction of external and internal orders, and this evolution will contribute to the slowdown of economic growth. Industrial production prices might drop in the coming months, due to the fallout of commodities at international trading (crude oil fell 68% from July’s all-time high, copper slid by 59%, and platinum dropped by 60% in the same interval), but also due to a weaker internal activity in industry”, Sinca told Wall-Street.

Translated by Camelia Oancea