SIMILAR ARTICLES

Document / PNL Government Program for next year

On Thursday, the appointed Prime Minister, Ludovic Orban, presented to colleagues from the National Office the document that he will submit to the Parliament, which… Mai mult

Ranking of discernment: Spectacular increase in August in the difference between Romania’s other EU countries’ borrowing costs

The long-term interest rate fell below zero in the Eurozone and dropped to only 0.28% on average at the EU level, half as compared to… Mai mult

Tourism balance drops to minus 36%, despite billions of public money that Government pumped into the market

Net costs for the state with holiday vouchers for public sector employees and the VAT cut for tourism will amount to RON 1,878 million in… Mai mult

Continuing quantitative easing: how justified is it? (III)

In this last article from the series devoted to the analysis of the quantitative easing performed by the European Central Bank (ECB), we will deal… Mai mult

Continuing quantitative easing: how justified is it? (II)

In this second article of the series dedicated to the analysis of the quantitative easing performed by the European Central Bank (ECB), we will focus… Mai mult

Cronicile

Brief picture of economy. 2018 GDP growth after first nine months: 4.2%

de Marin Pana , 10.12.2018

The economic growth on the first three quarters of 2018 was 4.2%, both in gross series and the seasonally adjusted series, according to data published by the INS in the first provisional version, which confirms the signal data.

Beyond an evolution below the initial expectation of 5.5%, we can see a slight decline in the GDP growth in the third quarter, although, paradoxically, we recorded the largest increase over the previous quarter.

The explanation is the unfavourable net effect, as we saw a record GDP growth of 8.8% in the reference quarter, Q3 2017, compared to Q3 2016.

*

  • Quarterly GDP in first nine months of 2017 (seasonally adjusted data)
  • Period              Q1       Q2       Q3       nine months 2018
  • GDP
  • % compared to the same period of 2017

*

Unfortunately, the same base effect less favourable than in the first half of the year will also occur in the last quarter, which makes it difficult to reach the level of 4.5% considered as the revised 2018 GDP growth (a result of 5.3% on Q4 2018 would be needed).

*

  • Evolution of quarterly GDP compared to the previous quarter (%, seasonally adjusted series)
  • Quarter
  • Evolution of quarterly GDP compared to the corresponding period of the previous year
  • Quarter

*

By category of resources, manufacturing industry contributed the most to GDP formation in the first nine months of 2018, with 23.6% of the total and 1.1 percentage points of the gross growth of 4.2%.

Substantial proportions were contributed by agriculture (a 5.5% contribution to GDP but a surprisingly good 0.6pp contribution to the economic growth, which shows the relatively good agricultural year) and trade (a 18.4% contribution to the 9-month GDP formation and also a 0.6pp effect on GDP, but attention, down to only 15.8% on Q3 2018)

Substantial contributions were brought by professional, scientific and technical activities (6.6% in 9 months, with an increased rhythm to 7.2% in Q3 2018) and the IT&C sector (5.3%, but with a loss in speed to +4.8% in Q3 2018), both with a contribution of 0.3 percentage points of the GDP growth of 4.2 percentage points.

Real estate transactions and public administration, education, health, defence, etc. also added 0.2 percentage points to the economic result, domains where the calculation methodology is mainly related to the salaries paid in order to assess the gross value added in the economy.

It is noteworthy the zero effect of a key sector, the financial intermediation and insurance industry, as well as the only negative value in this picture, from the construction sector (-0.2% in 9 months and a worrying -0.4% in Q3 2018).

A brief picture of Romanian economy’s achievements

We present below the brief picture of Romanian economy’s achievements, where the advance is robust in terms of volume but a little too high in terms of prices (+ 6.8% on the total gross value added), which significantly reduces the nominal value of the amounts accounted for the volume advancement. Hence the direct cause of GDP growth in real terms below those initially projected.

We can see that the domains with the best performance were agriculture and IT (which also recorded the lowest price increase index, except for real estate transactions) followed by professional and industrial activities.

On the opposite side, besides the relatively weak or even negative evolution in volumes, public administration, education, health, etc. and constructions also registered very high price indices that affected the overall economic outcome. The same thing, to a slightly lesser extent, can also be said about the financial intermediation and insurance sector, otherwise on a rise marked by profitability.

*

  • GDP by resource categories in the first three quarters of 2018 – gross series
  • Sector             Results            Volume evolution        Price change
  • Manufacturing
  • Trade, transport, auto repairs, hotels, etc.
  • Public administration, education, health, etc.
  • Real estate transactions
  • Professional activities, support activities, etc.
  • IT&C
  • Agriculture, forestry, fishery
  • Construction
  • Financial intermediations and insurance
  • Entertainment, home repairs, other services
  • Gross added value
  • Net taxes on products
  • GDP

*

It should be emphasised the double-digit increase in net taxes, although prices have advanced here with only a little more than one percentage points. They reached thus a share in the structure of GDP growth a little bit higher than the practice. Structured after the first nine months of the year on a ratio of only 76% gross value added (3.2pp) to 24% net taxes (1pp), in order to result in the GDP growth of 4.3%.

Last, but not least, the negative balance between exports and imports of goods and services should be emphasized. A balance that increased to over RON 17 billion (exports of RON 292.2 billion and imports of RON 309.5 billion). Not only did the growth rate of exports (+ 5.9%) fall below imports (+ 9.1%), but also the price index was higher, +4.8% in exports and +4.1% in imports.

The result of this mix: an effect of -1.5 percentage points on GDP growth. In other words, we would have achieved the planned economic growth plan if we had had the capacity to cover an increased domestic demand and the competitiveness with our main foreign trade partners which to reduce, not increase the foreign deficit.

Mergeți în homepage ›

Publicat la data de 10.12.2018

Lăsați un comentariu


NEWS

Transport Ministry announces it has sent to Brussels the financing request for Sibiu - Pitesti highway

The Transport Ministry, as the Intermediate Body in Transport, approved the financing request for the project "Construction of Sibiu - Pitesti highway", Sections 1, 4… Mai mult

Romania and Juncker Plan: EUR 720 million attracted, of which 35% by Transgaz for BRUA

(The map of investment financed through Juncker Plan, by GDP share. Darker colours mean higher shares) The operator of national natural gas pipelines, Transgaz (TGN)… Mai mult

Top 3 reasons why young people leave Romania

Lack of trust in authorities, corruption and low living standards are the main reasons why young people leave Romania. The data is part of a… Mai mult

IMM Invest Romania – program implementing rules have been published

The Ministry of Public Finance announces that it has issued the methodological norms for the implementation of the Program for supporting small and medium-sized enterprises… Mai mult

Pollution import and car park expansion: comparisons with the other EU states

Romania is the EU country with the fewest cars in terms of the number of inhabitants, according to data recently published by Eurostat. We appear… Mai mult

Government is trying to save budget deficit: reductions in public administration system, cancellation of bonus for harmful conditions, excise duty on soft drinks

The Government is preparing the public for the first measures aimed at avoiding the budget slippage, which would be applied by the PSD-ALDE government. News… Mai mult

Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor's Office, a position for which he was heard on Thursday, 11… Mai mult

Romania - EU country with highest risk of dying in a road accident, Bulgaria is quickly decreasing number of victims since it built motorways

Romania recorded the highest road deaths in the EU also last year, with 96 deaths per one million inhabitants in 2018, almost double the EU… Mai mult

Latest developments in progress at Health Ministry: Differentiated wages based on performance, competitions organised at a regional level not by hospitals

Sorina Pintea announced on Thursday further new changes that will be brought to the functioning of the health care system, including new rules for employment… Mai mult

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult

Romania loses competition for a seat at UN Security Council. MAE Excuse: Campaign started too late

Romania lost to Estonia in the final vote to get the non-permanent member position within the UN Security Council for the period 2020-2021. On Friday,… Mai mult

Business internationalization / eMAG makes a step to entry five new international markets and targets a business of EUR 2 billion

eMAG hopes to get the opinion of the Hungarian Competition Council over the next two months for the acquisition of Extreme Digital, the market leader… Mai mult

"At a distance from books": 85,000 teachers (one third of educational staff) are graduates of distance learning

Approximately 85,000 teachers are graduates of distance learning (ID) programs, Education Minister Ecaterina Andronescu said at a meeting with school inspectors from Caras-Severin County. The… Mai mult