Romania’s statistics office INS revised upwards the rise in the first quarter’s (Q1) GDP  in real terms (comparable prices) from a mere 0.1% y/y to a more substantial 0.5% y/y on July 8, in its second preliminary estimate. The nominal GDP total was revised upwards to RON424.6bn (€85.3bn) .

The revised data does not imply significant adjustments in the dynamics of the economy, with core sectors of industry and construction expected to make a more consistent contribution to the year’s economic growth (seen broadly above 2% y/y, possibly above 2.5% in 2024) in the rest of the year.

The central bank in its July 5 monetary board decision already heralded “better than expected” economic growth in Q2.

The revaluation indicates Romania’s GDP expressed in real terms (chart) reached a new maximum in Q1, after the first estimate published on June 7 put the quarter’s GDP below that achieved in Q3 last year.

The quarterly growth rate of the seasonally (and workday) adjusted GDP also expressed in real terms was revised as well from 0.4% q/q to 0.7% q/q.

On the production side, a significant revision was operated on the volume of services delivered to households – which has increased by 0.4% under the revised data compared to 1.7% y/y decline under the previous estimates. 

The sole other significant contributor to the annual growth, on the production side, remains the sector of IT&C (+1.9% y/y value added generated). 

The volume of net taxes increased by 6.2% y/y (not much changed from +6.0% y/y under the June 7 estimate) making a significant 0.5pp contribution to the annual advance of the quarter’s GDP.

On the utilisation side, the real (comparable prices) consumption was revised at an annual decline of -0.9% y/y from a -0.1% y/y decline previously estimated, mainly because of the government’s consumption (-12.6% y/y from -2.9% previously).