Romania GDP Growth Slows as Virus, Supply Chains Hit Rebound

(Bloomberg) --

Romania’s economy advanced less than forecast in the third quarter as uncertainty over the pandemic, surging energy prices and supply chain disruptions hit industries across the board. 

Gross domestic product grew a preliminary 7.2% from a year earlier between July and September, less than the 9.7% median estimate in a Bloomberg survey. GDP rose 0.3% from the previous three months.

While Romania’s economy is expected to have one of the fastest recoveries in the European Union of about 7% this year, a political crisis that has left the government in limbo for two months and a deadly fourth wave of the pandemic that triggered new restrictions may put a drag on output. 

• Romania will probably have a slower economic growth this year than previously envisaged after the third quarter data, according to Ciprian Dascalu from Erste Group Bank, who cut his GDP 2021 growth forecast to 6.4% from 7.4%
• The advance is expected to slow further to 4% in 2022, compared with a previous estimate of 4.5%, Dascalu says
• “We suspect that a strong positive contribution from agriculture barely offset the large negative contribution from industry and construction, which posted large sequential contractions versus the previous quarter. Moreover, inflation is biting into nominal incomes and we expect real wage growth to remain barely positive.”

©2021 Bloomberg L.P.