SIMILAR ARTICLES

BNR – Risk map: Credit default risk got right to “high” level top position

The deterioration of investors’ confidence in emerging economies and the default risk of loans to companies and population are the biggest risks to financial stability… Mai mult

A (new) paradox: Public debt decreases as a share of GDP – cost increases with interest to what we borrow. Remarks

Although medium- and long-term foreign debt (DETML) has declined steadily over the last four years related to GDP, the amount paid for this debt has… Mai mult

Current account deficit – 15% higher after first four months of 2018

The current account of the balance of payments registered a deficit of EUR 2,053 million in the first four months of this year, about 15%… Mai mult

We and Juncker Plan: Bulgaria – 3rd position, Romania – 23rd position. How other neighbours are doing

The value and economic impact of the Romanian projects to attract resources from the so-called “Juncker Plan” of European investments are much lower, compared to… Mai mult

Sovereign Fund has been voted: Mechanism to remove “states’ pearls” from public control

The voting machine of the Chamber of Deputies (decision chamber) approved on Wednesday – 174 votes for, 98 against and 3 abstentions – the Law… Mai mult

Major surprise: CNP increases 2017 growth forecast by 0.5%. A sublime explanation

de Marin Pana , 6.11.2017

In the autumn forecast on which the 2018 budget is based, the National Commission for Prognosis, an institution under the Government’s authority, increased the economic growth projection for the current year to 6.1%, from the level of 5.6% announced only a few weeks ago in the preliminary autumn forecast.

The value used as a benchmark for the 2017 GDP (including for the general budget deficit, which threatens to exceed 3%), went up again. Started from RON 815.2 billion at the beginning of the year, it reached along the way (somewhere after the summer vacation) RON 837.1 billion and now it is mentioned the level of RON 842.5 billion.

*

  • Year
  • Version Q1
  • Version Q2

*

Not only the GDP result for the current year has been re-evaluated upwards by 0.65% but also all values until 2021. To be mentioned, all the values projected for the euro/ leu average annual exchange rate have been maintained, decreasing from 4.56 lei/euro for the current year to 4.50 lei in 2021 (?).

A warning signal for those who closely follow the data of the national economy, the annual GDP values for the interval until 2021, expressed in billions of euros, have been removed from the usual form of the table presented by CNP. From the values related to GDP/inhabitant, only those in RON remained while those expressed in EUR/inhabitant have disappeared.

Explanation is sublime

The CNP’s explanation for the spectacular and so far, one-time increase of the GDP growth estimate by half a percentage point in just a few weeks could only be found at the level of a radical change in the gross value added in the economy. Let’s see what the re-evaluation of the development pace in the main economic sectors indicates:

*

  • Increase of 2017 gross value added in the economy            Q1       Q2       change
  • Industry
  • Agriculture
  • Construction
  • Services

*

As the growth rate of the other component of GDP, net taxes on the product stagnated at + 4.2%, it results that the increase in the economic growth estimate appeared after the industry (the main engine of the Romanian economy) and agriculture have been re-evaluated significantly downward and services have changed their growth up by only a tenth of a percent.

The only plausible explanation (which should also cover the declines in the industry and agriculture!) comes from the construction sector, where the change from 1.5% to 7% within a few weeks appears to be quite bizarre. The correct recording of the production obtained and, particularly, of the intermediary consumption based on which it has been obtained, should be carefully monitored.

Change trick – 6.4% growth in second semester of 2017!

Without the need for in-depth knowledge of mathematics, let us simplify the situation at this point in relation to GDP developments in the second half of the year. For the first part of the year, we already have the seasonally adjusted value published by INS at the level of + 5.8%.

From the preliminary version, we knew that there would be a slight growth slowdown to only + 5.4% in the second half of the year, from which a perfectly plausible and otherwise very good 5.6% level for the entire 2017 would have resulted.

Now we have found ourselves with an AVERAGE OF 6.1% FOR THE WHOLE 2017. What does that mean? Well, like in the elementary school, it means that we need not just + 5.4% in the second half of the year to obtain the average level, but + 6.4%! That is, not some slowdown in growth but rather a strong acceleration, with a new record at the European level in the field.

For this purpose, the GDP deflator, which measures the prices in the economy and by which nominal GDP values decrease then to make the transition to the base period prices, more accurately THE REAL ECONOMIC GROWTH, has been discreetly increased from 4.1% to 4.2%. And that even though inflation measured by the consumer price index has been re-evaluated upwards from 1.9% to 2.2% (and from 2.3% to 2.6% in 2018, when the deflator still appears at 2.1 !?).

Obviously, the situation created by these disruptions of indicators from which the forecasted GDP growth results resembles the jokes with Radio Erevan. That would be a good occasion for jokes about statistics if CNP data were not the basis for 2018 budgeting process. A year when we might not find ourselves in the mood for jokes anymore.

Mergeți în homepage ›

Publicat la data de 6.11.2017

Lăsați un comentariu


NEWS

Subsidy of RON 900/month for employing a graduate based on contracts of indefinite duration

The National Agency for Employment (ANOFM) grants subsidies of RON 900/month to employers who employ graduates of educational institutions, with contracts of indefinite duration, within… Mai mult

C.P. Tariceanu, before the heads of Senates from EU: The European Commission has encouraged the parallel state, in Romania it is like in the 50's

Calin Popescu Tariceanu (foto) delivered a very tough speech on Friday, in the Senate, addressed to the European Commission, which he accused of encouraging the… Mai mult

National Bank of Romania wants to lower indebtedness limit in granting loans to individuals

The National Bank of Romania (BNR) sent to banks for consultation a draft amending Regulation 17/2012, which provides for a consistent lowering of the indebtedness… Mai mult

High impact provisions: Senate has adopted PSD-ALDE amendments to the Code of Criminal Procedure

Senators adopted on Wednesday the draft for amending the Code of Criminal Procedure, by 74 votes for to 28, against. The bill goes to the… Mai mult

RBL: Workforce crisis is worse than economic crisis - 3.4 million Romanians have left the country in last 10 years

Migration is one of the most serious problems facing Romania at this time, along with the lack of infrastructure. However, the return of Romanians to… Mai mult

World Bank: Romania's economy could grow by 5.1% in 2018

Romania's economy could grow by 5.1% in 2018, according to the World Bank summer forecast. The estimate has been improved by 0.6 percentage points above… Mai mult

Ministry of Energy: Natural gas from Black Sea will be exported through Onesti - Isaccea - Negru Voda network

The Ministry of Energy issued for Transgaz the construction permit for the consolidation of the transport system between Onesti (Bacau) and Isaccea (Tulcea) and for… Mai mult

Energy productivity: Romania goes up within Central European group

Romania reached 56% of the EU's average energy productivity in 2016, compared to only 43% in the year of the accession, according to data released… Mai mult

Document / Public procurement - Changes made by OUG: how to calculate guarantees, values over which contract must be publicly announced, how to change contract without resuming procedures

Under the promise of reducing bureaucracy and increasing efficiency in the public procurement procedure, the Government approved on Thursday an emergency ordinance that brings essential… Mai mult

AmCham: Romania should have a national investment plan. Four major areas with competitive potential

The consistency of the measures needed to encourage public and private investment, as well as proposals for the development of the four major areas considered… Mai mult

"We are pulling ourselves out of maps!": Business community’s solutions for infrastructure development

In the medium and long term, companies in Romania lose business because of disarticulated infrastructure; the country overall loses new investment, the state budget loses… Mai mult

New Romania’s Agent at the EU Court of Justice: 32 years old, failed exams, a person supported by Olguta Vasilescu

The government agent at the EU Court of Justice, Razvan Horatiu Radu, was replaced by the Government by a decision of Prime Minister Viorica Dancila… Mai mult

European Commission urges Government to "fully and immediately" reimburse car taxes

The European Commission asks Romania to urgently align the system of taxes collected on the car registration to the European one. The request is announced… Mai mult

CCR President in a visit to Russia, despite that Ministry of Foreign Affairs has recommended not to make this visit

CCR President Valer Dorneanu is in Russia today, where he attends the Sankt Petersburg International Legal Forum, despite that MAE has recommended not to make… Mai mult

List of black payments / Corruption in health sectors: Bribes - 25% of contract value, higher than in other fields

Romania is the European country with the lowest spending in the health sector. However, DNA statistics show that the bribe in this field is higher… Mai mult