Romania’s economy accelerates 8-8.5% in Q2 this year, analysts estimate before official statistics

Romania’s gross domestic product (GDP) advanced 8-8.5 percent in the second quarter of the year, below the finance minister’s 9 percent recent prognosis, according to analysts NewsIn interviewed before official statistics due on September 1.

The chief economist of Romania’s Raiffeisen Bank, Ionut Dumitru, said economy grew 8.5 percent in the second quarter of the year, climbing to a peak of the last four years. In the second quarter of 2004 the GDP accelerated to more than 9 percent.

Another forecast points to a second quarter increase of 8-8.5 percent, stemming from construction and foreign direct investments, according to the Credit Europe Bank analyst Georgiana Constantinescu.

Another analyst, the chief economist of Romania’s largest bank by assets Banca Comerciala Romana (BCR), Lucian Anghel, expects an economic growth of 8 percent but no more than 8.4 percent.

"I think the minister’s prognosis is an optimistic scenario," he said, adding consumption continued to advance in Romania, spurred by lending boom, services and constructions. However, he admits the possibility of a 9 percent peak, just as Finance Minister Varujan Vosganian had estimated.

Moreover, most analysts polled by NewsIn deem the GDP growth pace will remain high in the third quarter too, helped by the good agriculture output this year.

Yet, this healthy contribution to the general economic growth could be offset from July to September by the slowdown in constructions and industry, according to the chief economist of Alpha Bank, Ella Kallai.

Analysts remain reticent in changing yearly prognoses despite the healthy GDP advance in the first three months, she said, adding the last three months of the year could bring along a brake of the lending boom after the new credit norms limiting risks voted by the central bank are applied.

Lending could pace at 40 percent at the end of the year, versus a 60 percent advance in the first semester, Constantinescu estimated.

In July, lending reduced for the first time this year to 55.8 percent, the central bank said.

At the end of last week a new set of rules was published in the country’s Official Gazette. The new lending norms require banks to carefully analyze the clients’ payback capacity taking into account a level of incomes seen as eligible by customers, which cannot exceed more than 20 percent the previous year’s level.

Banks in Romania will require individual tax records of clients before approving a credit and will establish a different maximum degree of indebtedness depending on criteria such as credit destination or currency.

The Romanian economy grew 8.6 percent in the first six months this year after a record 9 percent advance in the second quarter of the year, the finance minister estimated last week.

Romania’s economy accelerated 8.2 percent to 86.745 billion lei in the first three months of the year.

NewsIn