The first estimate of the economic growth in Romania in the third quarter shows a reduction down to 3.5% (year-on-year), after the previous quarter’s Gross Domestic Product hardly managed to stabilize its speed to 4%.
Estimates of Capital Economics analysts are based on the following arguments:
- reduction in retail sales, from 5.4% y-o-y in July to 1.5% in August;
- decreases in the manufacturing industry, agriculture and construction.
„Overheating risks are on the rise, despite the growth slowdown,” the analysts note.
The current account deficit increased to 4% of GDP (the amount of the last 12 months), „the highest in the last five years and among the largest among the world’s emerging economies.”
On the other hand, wages have a double-digit growth, and 5% inflation (y-o-y, last month) is above the upper limit of the central bank’s target, which makes Capital Economics analysts believe that BNR can no longer delay an „aggressive” increase of the reference interest rate.
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