Romanian GDP confirms the slowdown

As this is a flash release, we only see the total rates at this stage. The full sectorial breakdown of components is due on 7 December. The gross numbers show that the economy nearly stagnated in the third quarter of this year, adding a meagre 0.2% versus the same quarter of 2022. This takes the overall GDP growth after three quarters of 2023 to 1.1%, while our estimate – which was already at the lower end of the consensus – was 1.8%.

High-frequency indicators have already been pointing to a bleak outlook for this quarter’s growth, as retail sales remained weak and industrial production continued to contract. We don’t know yet whether a positive surprise from agriculture materialised but even if it did, it would mean an even worse performance elsewhere. Investments and net exports are likely to have contributed positively.

Concerning the data series, they continue to show visible mismatches between the gross and the seasonally adjusted series. The latter saw some significant revisions. For example, in the first quarter, sequential growth was upwardly revised from -1.0% to -0.7%. In the second quarter, it was revised down from an outstanding 1.7% to 1.3%. We suspect that this is rather due to the statistical model adjustments (acknowledged by the National Statistical Institute) and that the series will normalise over time. Until then, we prefer to focus more on the gross annual rates and are more sceptical about the seasonally adjusted numbers.