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Valentin Tataru, Economist at ING, points out that the flash 2Q18 GDP data shows the sequential quarterly growth at 1.4% versus 0.1% in 1Q18 for Romania, which translated into 4.2% year on year growth.  

Key Quotes

“The print is above our call of 3.4% and Reuters consensus of 3.8% and comes in line with the latest central bank expectation for the quarterly pace of growth which is “anticipated to regain traction” compared 1Q18. This will make the output gap to “re-embark on a slightly upward trend” but still lower than previously forecasted.”

“Private consumption has most likely remained the growth driver while on the supply side we expect decent (but not extraordinary) contribution from services and industry, in line with the recent high-frequency data.”

“While the detailed breakdown is due on 7 September, today’s flash data makes the official government forecast of 5.5% GDP growth for 2018 look far too optimistic.”

“Also, our 3.5% forecast appears marginally pessimistic now. We see the full 2018 growth closer to 4%, and risks are broadly balanced.”