Romania's economy advances 4.7pct in H1 2019, fuelled by consumption

Romania's Gross Domestic Product (GDP) in the first six months of 2019 by 4.7pct in unadjusted terms and by 4.8pct when adjusted for seasonality, compared with H1 2018, mainly fuelled by household consumption, according to provisional data released on Friday by the National Institute of Statistics (INS). Compared with Q1 2019, the GDP in Q2 2019 was up 1pct in real terms, while compared with the same quarter of 2018 it was up 4.4pct in unadjusted terms and 4.6pct when seasonally adjusted. "The seasonally adjusted series of the Quarterly Gross Domestic Product has not changed, while the revision of the estimates for the second quarter of 2019 against the 'flash' variant published in the press statement 205 of August 14, 2019, was insignificant. The seasonally adjusted series are recalculated quarterly as a result of changes in adopted models, the number of regressors used, the change in the unadjusted series and the number of observations available," says INS. In the seasonally adjusted series, the estimated H1 2019 GDP was 507.888 billion lei current prices, up in real terms by 4.8pct from H1 2018. In unadjusted terms, the H1 2019 GDP was 440.962 billion lei current prices, up in real terms by 4.7pctfrom H1 2018. Contributing toward the GDP growth in H1 2019 as against H1 2018 were almost all branches of the economy, with more important positive contributions provided the following branches: wholesale and retail trade, repair of motor vehicles and motorcycles, transport and storage, hotels and restaurants (+ 1.2pct), with a share of 20.3pct in GDP formation and an increase in activity volume of 5.8pct; constructions(+ 0.5pct), with a share of 3.5pct in GDP formation and an increase in activity volume by 14.9pct; information and communications (+ 0.5pct), with a share of 5.8pct in GDP formation and an increase in activity volume of 9.9pct; professional, scientific and technical activities; administrative services and support services (+ 0.5pct), with a share of 7.0pct in GDP formation and an increase in activity volume of 7.7pct. Net tax on products, with a share of 9.5pct in GDP production, contributed 0.9pct to the growth of the GDP, as their volume increased by 8.9pct. The increase in the GDP was mainly due to: household final consumption expenditure, which volume increased by 6.1pct contributing 3.9pct of the GDP growth; gross fixed capital formation, which contributed 2.3pct to the GDP growth as a result of its volume increase by 12.4pct. "A negative contribution to GDP growth was seen from net exports (-2.0pct), a consequence of a 2.7pct increase in exports of goods and services correlated with a higher increase in the volume of imports of goods and services, by 6.4pct," according to INS. Compared with Q1 2019, GDP in Q2 2019 was up 1pct in real terms. The seasonally adjusted GDP data estimated for Q2 2019 was 256.676 billion lei current prices, up 1pct in real terms from Q1 2019 and 4.6pct against Q2 2018. In unadjusted terms, the estimated Q2 2019 GDP was 240.578 billion lei current prices, up in real terms by 4.4pct from Q2 2018. At the end of last week, Standard & Poor's credit rating agency reconfirmed Romania's country rating at BBB- with a stable outlook, but pointed out that the growth rate of the Romanian economy would remain below 4pct in 2019, after which it is expected to dwindle in 2020-2021 due to a slowdown in external demand, in wage growth and a more neutral fiscal environment. AGERPRES (RO - editor: Oana Tilica; EN - author: Corneliu-Aurelian Colceriu, editor: Adina Panaitescu)