Romania: Growth saves the day

There is not much to chew on in today’s data as the growth details will only be available on 8 June. Regardless of the details however, one thing is certain: as we speak, the economy is above pre-pandemic levels! This is about one quarter earlier than we had envisaged and paves the way for a GDP growth rate in 2021 that could dwarf even our optimistic 5.5% forecast.

As the retail, construction and industrial sectors have not necessarily posted impressive numbers in the first quarter, we suspect that the main growth drivers have been related to the public sector and possibly agriculture. The latter could benefit from positive base effects in 2021 after a very weak 2020. We will, however, wait for the growth details before redoing the maths and consider revising our forecast.

It goes without saying that a lot depends on the epidemiological developments and the vaccination pace where -lately- the authorities had to find more and more innovative ways to maintain vaccinations at a decent pace. Despite this, Romania still finds itself very low in the EU rankings on the number of Covid-10 vaccination doses per 100 population. The number of daily infections on the other hand has been kept well in check during the third wave and everything points towards a relaxed summer.