Strong but not ‘wow’: Romania’s growth rate misses our estimate

As usual, there is little to get your teeth into with this flash data as the growth details will only be available on 7 September. It is sensible however to assume that the bulk of the growth was carried out by private consumption boosted by the pent-up demand that still exists. Investments (public ones in particular) have probably continued to contribute positively, while the negative contribution of the net exports might have slowed down a tad.

After a very relaxed summer from the coronavirus point of view, marked by a very low number of daily infections but also by a very low vaccination rate, Romania is currently at the beginning of the fourth wave of Covid-19 infections, with the peak estimated to materialise in mid-September. Authorities have already made it clear that imposing restrictions that come even close to the ones which occurred during the previous waves is out of the question. However, uncertainties remain and have been building, including some sporadic quarrels in the coalition government, Romania is still awaiting EU approval on its Recovery and Resilience plan, and there are still unknowns regarding the budgetary consolidation strategy due to be published in a couple of months or the upward trending inflation expectations.