Wednesday, August 10, 2011

Romanian June Industry, Export Growth Slows, Recovery May Weaken

Romanian industrial output and export growth slowed in June on muted demand for manufactured products, a sign the Balkan country’s economic recovery may be weakening.

Production grew a seasonally adjusted 3.2 percent from a year earlier after an 8 percent rise in May, the Bucharest-based National Statistics Institute said in an e-mailed statement today. Output fell 2.2 percent on the month. Exports rose 12 percent in June on the year, compared with 27 percent growth in May, according to a separate statement from the institute.

Polish, Czech and Hungarian manufacturing indexes in July signaled a slowdown in economic growth, pointing to a region- wide weakening in economic momentum, as the U.S. and euro-area economies lose steam.

Demand for Romanian exports such as Dacia SA cars and industry, which grew 10 percent in the first quarter, pushed the country’s economy out of the worst recession on record. The economy grew 1.7 percent in the first quarter, ending a two-year contraction.

Exports and industrial output will drive the economy’s 1.5 percent expansion this year after shrinking 1.3 percent in 2010, according to the International Monetary Fund. A good harvest in 2011 may boost growth beyond the central bank’s 1.5 percent growth forecast, Governor Mugur Isarescu said yesterday.

Production of manufactured goods rose an annual 2.8 percent in June from 7.8 percent in May on the year, while mining output growth slowed to a yearly 5.7 percent from 16 percent. Electricity and thermal energy output increased 5.2 percent.

Romania’s trade deficit narrowed in June to 850 million euros ($1.2 billion) from a year earlier, compared with a revised 1.2 billion-euro gap in May, the institute said today in a separate statement.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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