2018.08.1408:34:00UTC+00Romania GDP Expands More Than Expected In Q2

Romania's economy grew more-than-expected in the second quarter, after almost a stagnation in the previous three months, preliminary data from the statistical office showed Tuesday.

Gross domestic product grew a seasonally adjusted 1.4 percent from the first quarter, when the economy expanded just 0.1 percent. Economists had forecast 1.3 percent growth. On a year-on-year basis, GDP rose a seasonally adjusted 4.2 percent year-on-year after a 4.3 percent growth in the previous quarter. On an unadjusted basis, the economy expanded 4.1 percent year-on-year following 4 percent growth in the first three months of the year. ING Bank economist Valentin Tataru said the latest flash data for the second quarter GDP makes the official government forecast of 5.5 percent growth for 2018 look far too optimistic.

"We see the full 2018 growth closer to 4 percent, and risks are broadly balanced," the economist said. "From the monetary policy stance, "a somewhat slower reduction in the degree of accommodation" is expected, which could keep household spending afloat, while policy (in)consistency will play an ever greater role on economic sentiment, as two electoral years are approaching."