Romania's gross domestic product (GDP) expressed in real terms (comparable prices) increased by 4.3% in the third quarter (Q3) of 2018, compared to the same period of last year.

The annual (y/y) growth rate accelerated from 4.2% in Q2 and 4.1% in Q1.

The seasonally-adjusted GDP edged up by 1.9% in Q3 compared to Q2 (q/q), a significant advance in absolute value and also compared to the 1.5% q/q advance in Q2 and the 0.3% q/q advance in Q1.

The growth in Q3 was driven by the expansion of private consumption and by the continuous inventory build-up. The net imports (measuring the share of resources imported for domestic utilization) accounted for 2.8% of GDP in Q3, down from 3.0% in Q2 but at a very high level in absolute value.

On the GDP formation side, agriculture contributed 1.2 percentage points (pp) to the overall 4.3% y/y advance in Q3, while industry contributed 1.1pp. The net taxes on products, measuring the volume of taxes raised by the government from companies and households (net of transfers to companies and households) contributed a significant 1pp to the overall GDP growth indicating tougher fiscal pressure.

On the GDP utilization side, household consumption contributed 2.8pp to the overall 4.3% y/y GDP growth in Q3. However, the inventory build-up contributed a massive 3.3pp prompting sustainability concerns.

The gross fix capital formation (investments), in contrast, contributed a negative 0.4pp to the overall growth in the quarter.

Romania’s economy accelerates in the third quarter

editor@romania-insider.com