Tuesday, September 6, 2011

Romania’s Economic Growth Slowed in Second Quarter on Demand

Romania’s economic expansion slowed in the second quarter as industrial output and export growth lost pace on waning demand abroad.

Gross domestic product grew an unadjusted 1.4 percent, after an increase of 1.7 percent in the first quarter, the National Statistics Institute in Bucharest said today in an e- mailed statement. The figure matched a preliminary estimate on Aug. 16. GDP advanced an adjusted 0.2 percent from the previous three months.

Growth is slowing across the region as Europe’s sovereign- debt crisis roils markets and dents consumer confidence. Romania’s economy is counting on western European demand for its goods, such as Dacia SA cars and Nokia phones, to support a recovery from the worst recession on record.

The Balkan nation took a 5 billion-euro ($7 billion) precautionary loan from the International Monetary Fund and the European Union this year as it seeks to reassure investors it will maintain fiscal discipline ahead of elections in 2012. The government has raised taxes and cut public wages and benefits to narrow the budget deficit to below 3 percent of GDP by next year from an estimated 4.4 percent this year.

“Industry had the biggest growth in the second quarter of 4.9 percent, followed by agriculture with an increase of 3.4 percent,” the institute said in the statement. “Net exports had a negative impact on the GDP as imports grew faster than exports.”

Romanian industrial sales rose 13.5 percent in July and fell 4.2 percent on the month, the office said in a separate statement today.
Growth Estimates

The IMF and EU expect Romania’s economy to grow 1.5 percent in 2011 after shrinking 1.3 percent last year.

“Romania’s growth estimates still seem realistic for this year,” Lucian Croitoru, an adviser to central bank Governor Mugur Isarescu said in a phone interview yesterday. “Problems may occur if the slowdown continues in 2012. Then, the government may need to take additional measures because the planned reduction in the budget deficit will be much difficult to achieve.”

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net.

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

No comments: