Romania's Statistics Institute (INS) confirmed on Tuesday the previous estimates of the economic growth of 0.5 percent in the second quarter of the year compared to the first quarter and 0.8 percent for half year. This means GDP reached EUR 55.4 billion (RON 248 billion) by the mid-year point, supported by increases in construction and professional and service activities.

Total final consumption increased by 0.7 percent in the first half of 2012 compared with the corresponding period of the previous year, helped by 1.1 percent increase in expenditure by households.

The GDP estimate for the second quarter was EUR 31 billion (RON 139 billion) at current prices and growth in real terms of 1.2 percent compared to the second quarter of 2011.

Increases in the activity volume were registered in administrative services and service industries (6.1 percent) followed by construction (5.2 percent) and cultural activities; repair of household goods and other services (3.8 percent).

Workload reductions were recorded in public administration and defense, social security insurance, education, health and social assistance (1.9 percent), agriculture, forestry and fishing (1.6 percent), financial mediation and insurance (0.9 percent) and wholesale and retail trade, repair of motor vehicles and motorcycles transportation and storage, hotels and restaurants (0.2 percent).

From the point of view of the use of GDP in the second quarter of 2012, domestic demand grew by 0.9 percent compared to the same quarter of 2011, mainly due to a significant increase in gross fixed capital formation of 15.2 percent. Total final consumption increased by 1.1 percent, mainly due to the increase in final consumption expenditure of households (+1.6 percent). The final consumption expenditure of public administrations decreased by 1 percent.

Gross Domestic Product - seasonally adjusted data - estimated for the second quarter of 2012 was EUR 33.5 billion (RON 150 billion) at current prices, in real terms up by 0.5 percent compared to the first quarter of 2012.

Through the budget rectification from August, the GDP established in nominal terms at EUR 135 billion (RON 607 billion) after inflation rate increased from 3 percent to 3.5 percent, increasing the average exchange rate from 4.21 to 4.45 RON/EUR  and review of GDP in the years 2010 and 2011.

Last year GDP grew by 2.5 percent, supported mainly by the development of agriculture, which saw an 11.3 percent rise, and the industrial sector, which was up by 5 percent.

Ioana Toader, ioana.toader@romania-insider.com