In seasonally adjusted data, Romania’s GDP grew by 2.8% in the first quarter of 2023 as compared to the first quarter of 2022.
The country’s economy increased by 0.1% in the first quarter of 2023 as compared to the fourth quarter of 2022.
In 2022, Romania’s economy grew by 4.7% due primarily to commerce, IT&C, constructions and real estate transactions, while the agriculture and the industry had negative contributions.
The first-quarter growth rate is below the level recorded in the fourth quarter of 2022 when the country’s economy accelerated to 4.5%, after advancing by 3.7% in the third quarter of 2022. The evolution, however, is below the expectations of economic analysts who anticipated a GDP growth of 3.5%-4%.
Romania’s national commission for prognosis and statistics in its spring report revised downward its projection for the country’s inflation to 7.4% at the end of 2023 from a previous projection of 8% in January 2023, and kept its forecast on the country’s 2023 economic growth at 2.8%.
According to the prognosis commission, overall, the construction and services sectors are expected to thrive in 2023, seeing upwardly revised increases compared to the previous forecast (+0.8 and +0.4 percentage points, respectively), but their positive contribution will be diminished by industry, affected by supply chain disruptions and a moderate external demand. The constructions market is estimated to grow 7%, supported in particular by the component of engineering constructions stimulated by the absorption of European funds, while services are seen climbing 3.1%.
The European Commission believes Romania’s economy will see higher growth than expected and raised its real GDP growth forecast from 2.5% to 3.2% for 2023. Overall, real GDP is projected to grow by 3.2% in 2023 and 3.5% in 2024. Risks to the forecast are tilted to the downside as delays in the implementation of the National Recovery and Resilience Plan (NRRP) could reduce investments.
“Growth is set to continue, albeit at a slower pace than in 2022 due to persistent inflation, tight financing conditions and low growth in trading partners. Core inflation is expected to peak in 2023, and headline inflation to remain above the inflation target over the forecast horizon. Unemployment is projected to only marginally decline, keeping the labor market relatively tight and wage increases high,” the European Commission says.