Romania’s economy will pick up speed in the third quarter at a rate of 2.6% to 3% from the same time last year, which would be its fastest growth in the last three years. This is because of the good harvest and of the industry growth and return of construction sector to positive territory, analysts say.
“Our estimates point to an about 3% of GDP growth in annual terms for the third quarter of 2011 and 2.2% for the first nine months of the year,” says Catalina Molnar, senior economist of RBS Bank. “Industry continued to increase at the same rate as in the second quarter, while the construction sector will see its first positive trend after nine quarters of decline in a row.”
She believes most of the positive contribution of the outstanding harvest of this year will show in the third quarter.
President Traian Basescu announced before everybody else that the third quarter economic growth was 3% two weeks ago, after a round of talks with the International Monetary Fund mission, which was in Bucharest for the third assessment of the agreement with Romania. Most important rises came from agriculture – 12%, construction sector – 10% and tourism – 19%, the president said.
The year 2011 started out quite well with 1.7% GDP growth in the first quarter compared with the same time in 2010. However, the second quarter came with a slowdown of the annual pace, an indicator that foreign markets and rating agencies look at, to 1.4%.
The good influence of agriculture seems to have helped the economy pick up speed in the third quarter.
However, when comparing with the situation last year, one also must factor in the base effect, considering that the economy slid back into recession in the third quarter of 2010 because of the VAT hike to 24% and the 25% cut in the public sector workers’ wages.
BCR, the largest bank on the local market expects the GDP’s real growth in the third quarter to be 1%, compared with the second quarter (seasonally adjusted data) and 2.8% in annual terms, the fastest growth of the last two years.
The bank is also considering revising the growth forecast for 2011 towards 2%, but continues to believe recovery will be slow over the next few years because of the slow economic growth in the euro zone.
Ionut Dumitru, chief economist of Raiffeisen Bank, sees 2.8% GDP growth in the third quarter of 2011 compared with the third quarter of 2010 and 0.9% (seasonally adjusted data) compared with the second quarter of 2011.
A more pessimistic forecast comes from Melania Hancila, chief economist of Volksbank, who sees 2.6% economic growth compared with the third quarter of 2010.
Dan Bucsa, chief economist of UniCredit Tiriac Bank, says the second half estimate was 1.9% year-on-year equally divided between the two quarters. The growth in the third quarter may be higher than in the fourth, though, he said.
(English version by Loredana Fratila-Cristescu)