The National Statistics Institute announced a decline in the Gross Domestic Product of the first quarter by 0.1% from the fourth quarter of 2011, lower than expected because of the heavy snowfall that blocked roads, caused trade delays and forced construction work to stop.
“The data is good, it will allow us to meet the new economic growth target of 1.7% for 2012 undertaken by the govenrment and the IMF. Construction was the most affected by the bad weather in the first quarter,’ said Ion Ghizdeanu, chairman of the National Forecasting Commission.
The question is what will happen in the second quarter, which has already reached its mid point. Ionut Dumitru, Raiffeisen Bank’s chief economist says, “GDP in the second quarter will be higher than in the first quarter though not by much. We might see a rebound in the second quarter because of construction [sector] and services should do better, as well. As for industry, it is hard to tell how it will perform. We will not revise our expectations of 0.5% economic growth for 2012.”
The 0.5% growth expected by Raiffeisen is three times lower than the official forecast. Other banks, like BCR and UniCredit, see growth at 1% in 2012, after a 2.5% in 2011.
The 0.1% decline in the first quarter of 2012 compared with the fourth quarter of 2011 comes after a 0.2% decline in the fourth quarter from the third, which means the economy slid back into recession as in the 2009-2010 period, when the GDP would go down from quarter to quarter.
The economy is still at 90% of the highest post-1990 quarterly GDP, recorded in the second quarter of 2008, after which the decline started.
The economy’s performance in 2012 will depend on the progress of the euro zone and of the largest trade partners of Romania: France, Germany and Italy. The euro zone had zero growth in the first quarter compared with the fourth quarter of 2011, but the German economy posted surprise growth of 0.5%.
(English version by Loredana Fratila-Cristescu)