Romania: Industrial production accelerated in April
Romanian industrial production accelerated to 5.7% YoY (2.0% MoM) in April from 4.2% in March, but still contracted in sequential terms by -0.5% QoQ
The manufacturing sector bore all the burden of growth in April, accelerating by 3.8% MoM as external demand is showing signs of stabilisation after the pronounced moderation we saw in 1Q18. The latest Economic Sentiment Indicator (ESI) also indicated a slight return of optimism in the manufacturing sector.
Manufacturing confidence recovers slightly
Mining and utilities on the other hand contracted 0.6% and 6.2% MoM, respectively. With industrial capacity utilization still below pre-crisis levels, there is enough slack to cover an eventual higher demand from existing production facilities.
The data is broadly in line with our call for a slower economic growth this year. We see 2018 GDP growth at 3.5%, well below the government's forecast of 5.5%. This should narrow the output gap and cool down inflation, but it will also put pressure on the public finances.
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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