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Economic growth in H1 and Q2 at record levels of 8.8 pc, 9.3 pc

The investments have also registered a significant growth, by 31.8 pc to RON 32.45 bln in the first six months of this year compared to the same period in 2007. Record growth unsustainable, analysts say.

Bucharest - The real economic growth registered in the first semester has grown to a level of 8.8 per cent while that registered in Q2 has grown to a level of 9.3 per cent, with both values representing record-breaking levels for Romania, according to the INS data.

The GDP was estimated at a level of RON 195.76 bln in H1 and at RON 109.01 bln in Q2, a communiqué issued by the INS shows. The National Statistics Institute has compiled quarterly data since 1998. From 1990 to 1998 Romania either registered an economic downturn either the economic growth rhythm was smaller.

When it comes to the economic growth registered every six months, the previous record stood at 7.4 per cent and was registered in H1 of 2006. When it comes to quarterly economic growth, the previous record stood at 7.9 per cent and was registered in Q2 of 2006. The highest levels of quarterly economic growth had been registered in July-September 2004, October-December 2004, and stood and 9.8 per cent and 9.5 per cent respectively, however no relevant comparisons can be conducted between the various quarters of a single year.

In August, Varujan Vosganian, the Minister of Economy and Finances, pointed out that the GDP has registered a growth of 8.6 per cent in the first semester of this year, on the backdrop of an economic growth of 8.9 per cent registered in the second quarter, both levels representing a record for the last two decades.

According to the INS data, the net investments in the national economy have grown by 31.8 per cent to RON 32.45 bln in H1 compared to the level registered in the same period last year.

The investments in new construction works have totalled RON 15.88 bln in H1, representing 48.9 per cent of the total investments, compared to a share of 46.9 per cent registered in H1 of 2007.

The investments in construction works grew by 33.9 per cent in H1 of this year. According to the communiqué, the following were the main economic branches that absorbed most of the investments: industry, construction works, commerce, vehicle, motorcycle and personal goods repair works, transportation, storage and communications, public administration. In Q2 the investments grew by 30 per cent to RON 20.07 bln.

Record growth unsustainable, analysts say

The economic growth levels registered in H1 and Q2 of this year, representing record levels for Romania, have surpassed the market estimates but they are unsustainable and based on volatile sectors such as construction works and agriculture, the economic analysts think. ‘I believe that it is an unsustainable growth based on construction works and agriculture and is not repeatable. In my opinion, the reality is distorted and the growth is generated by volatile sectors covering a more modest economic performance' Ionut Dumitru, the head of the Raiffeisen Bank's research department, has stated yesterday for Mediafax. When it comes to the demand side, the ING analysts consider that both private investments and private consumption maintain high levels. They consider that the GDP will grow in Q3 of this year by approximately 9 per cent, a growth based on the good agricultural results. However in the last three months the growth rhythm could register a certain deceleration following the slowdown registered in industry and construction works.

In the opinion of BRD-Groupe Societe Generale specialists, the economic growth registered in the first semester could determine the National Bank of Romania to hike the monetary policy interest rate if the institution will take into account the hypothesis of economic overheating. However the economists point to the fact that the recent favourable inflation data and the current account deficit contradict that hypothesis.

 

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Tags: registered growth economic works construction investments levels record brd ing