Romania: Industry confirms the lower cruising speed

October industrial production confirms our call for lower, but still decent GDP growth in 2018

As usual, the industrial production data is subject to –sometimes important - statistical revisions. It’s for this reason that the October 5.8% year-on-year growth looks like a slowdown compared to the previous month's 6.0% (upwardly revised) growth. Nevertheless, today’s data is in line with this year’s average and confirms that the economy is neither heading for a hard landing nor re-accelerating towards previous year's growth rates.

This time, it was the mining sector leading the growth, accelerating by 1.8% versus September 2018 though it still posted a -3.3% contraction compared to October 2017. The manufacturing and energy sectors expanded in October by 0.2% and 0.3% versus the previous month, and by 5.3% and 2.8%, respectively, versus October 2017.

Manufacturing confidence stays afloat…

...but the external context doesn't help

We expect GDP growth for the whole year to come in at 4.2% which looks like a sharp deceleration from last year’s 6.9% but is nevertheless more in line with the economy’s potential. Today’s data supports our view.