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December 8, 2017 www.intellinews.com I Page 9
Consumption pushes up Romania’s GDP growth to 8.8% y/y in Q3
Iulian Ernst in Bucharest
Romania’s GDP increased by 8.8% y/y in Q3, the statistics office said on December 5, confirming the figure that had prompted surprise when it was issued as a flash estimate on November 14. Seasonally adjusted, the GDP leapt by 2.6% q/q after a 2.0% advance in each of the previous two quarters.
The outstanding growth was pushed up by drivers that are likely to ease (or even reverse
in the case of agriculture) next year, preparing the ground for slower growth rates in 2018 compared to the high base established this year. The government’s expectations of a 5.5% GDP advance in 2018 seem very optimistic at this time, even though this year’s performance might exceed the 6.1% estimate.
In the nearer term, the impetus for growth is likely to continue in Q4, before losing steam during 2018.
Agriculture contributed 2.6pp to the annual growth rate in Q3, on the formation side. It was the second-largest contribution in the past dec- ade and above-average harvests are unlikely in consecutive years (although this happened
in 2013-2014).
On the utilisation side, households’ final consumption contributed a massive 7.9pp — the most robust contribution made by private consumption since Q2 2008. However, after the sharp rise of households’ income in recent years, no significant wage hikes