Snaps
12 December 2018

Romania: Industry confirms the lower cruising speed

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

290118-image-Romania-industry-powerplant.jpg
Source: shutterstock

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…

 - Source: EC, NIS, ING
Source: EC, NIS, ING

 ...but the external context doesn't help

 - Source: EC, NIS, ING
Source: EC, NIS, ING

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.