Friday, November 13, 2009

Romanian Q3 GDP contracts 7.1 pct y/y

BUCHAREST, Nov 13 (Reuters) - Romania's economy shrank by a much-less-than-expected 7.1 percent on the year in the third quarter, compared with a contraction of 8.7 percent from April to June, unadjusted data showed on Friday.

Gross domestic product fell 0.7 percent quarter-on-quarter in seasonally adjusted terms in July-September, compared with a fall of 1.1 percent in the second quarter.

Analysts said the data was a positive surprise and could lead to a less worse full-year result than the 7.5-8.0 forecast by the International Monetary Fund.

However, they added that it would not likely affect monetary policy, because the main concern there was political instability stemming from a government crisis that has stalled reforms and threatened the flow of funds from Romania's 20 billion euro IMF-led rescue package.

Economists polled by Reuters earlier this month had produced mid-range forecasts for falls of 9 percent year-on-year and 0.5 percent quarter-on-quarter.

At 0805, the leu was bid at 4.2960 per euro, little changed from levels before the data.

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KEY FIGURES

GDP (pct change) Q3 Q3 fcst Q2

yr/yr -7.1 -9.0 -8.7

q/q -0.7 -0.5 -1.1

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ANALYST COMMENTS:

ROZALIA PAL, UNICREDIT TIRIAC BANK IN BUCHAREST

'Expectations were at about -9.0 percent, so this is a positive surprise. I don't think the seasonal adjustment determined the difference compared to estimate.'

'I do not think the difference between 9 and 7 percent will influence monetary policy.'

NICOLAIE ALEXANDRU-CHIDESCIUC, ING ( ING - news -people ) BANK IN BUCHAREST

'The unadjusted 7.1 percent contraction figure seems bizzare ... but quarter on quarter data clearly indicates a diminishing of the pace of contraction. That make us expect positive growth figure for Q4.'

'Clearly, industrial production has been a factor and further improvement in output would also help the expected growth development in Q4.'

IONUT DUMITRU, RAIFFEISEN BANK IN BUCHAREST

'Bottom line is that it's much better than (market) estimates, and now we can expect a -7 figure for the whole year, which is better than the IMF forecast.'

'We might see mild quarter-on-quarter growth in the fourth quarter.'

'The only sector that we saw significant improvement was industry. Services, I guess, stabilised, construction continued to fall and we don't know yet how farming performed.'

'The leu has not reacted, probably, because volumes are too low.'

'These figures will not have major implications for monetary policy. Only fiscal and budgetary policies and the state of the talks with the IMF affect monetary policy.'

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