Page 44 - SE Outlook Regions 2024

Romania’s GDP increased by only 1.4% y/y in January-September, 2023, slowing down from 4.7% in 2022 and still below the 2% updated projection of the government.
The government hopes all major sectors will perform better in 2024 and later, except for construction, which already demonstrates a robust performance. The economy will grow by 3.4% in 2024, under the government’s scenario used for fiscal planning. International financial institutions (IFIs) are less optimistic.
The growth was driven in the first three quarters of 2023 mainly by three sectors – construction (+7.4% y/y), IT&C (+4.6% y/y) and agriculture (+5.0% y/y) – that contributed 0.3 percentage points (pp) each. The domestic demand for consumption and particularly investments are advancing faster than domestic production (GDP), but the country imported less: 4% of total domestic demand in January to September 2023, from 7% in the first three quarters of 2022.
On the GDP formation side, most of the categories of services (to households, to companies and real estate) advanced, making significant contributions in the first three quarters of the year. Financial intermediation marked a marginal contraction.
On the downside, the value added generated by industry (mining, quarrying and utilities included besides manufacturing) contracted by 2.7% y/y with a significant negative 0.6pp contribution.
On the GDP utilisation side, private consumption increased by 2.2% y/y and gross fixed capital formation surged by 10.7% y/y.
44 SE Outlook 2024 www.intellinews.com