According to the flash estimate, Romanian GDP in real terms increased by 1% YoY in Q2 2023. Looking at expenditures and its GDP growth contribution, Gross fixed capital formation contributed 2.3 p.p., while the final consumption expenditure of the General government contributed 1.6 p.p. to total GDP growth. Taking development for both quarters this year, the Romanian GDP amounted to RON 695.8bn and grew 1.7% in real terms during H1 2023.
Yesterday, the Romanian Institute of Statistics published its quarterly GDP flash estimate for Q2 2023. According to the estimate, Romanian GDP in real terms increased by 1% YoY and amounted to RON 396bn in Q2 2023. Taking development for both quarters this year, the Romanian GDP amounted to RON 695.8bn and grew 1.7% in real terms during H1 2023.
Seasonally adjusted quarterly Romanian GDP development [2000=100, base ; 2000 – Q2 2023]
Source: Romania national Institute of Statistics, InterCapital Research
Breaking this down by expenditure items, the biggest contributor was Gross fixed capital formation, which contributed by 2.3 p.p. to total overall GDP growth. Final consumption expenditures of the General government further amplified growth by 1.6 p.p. contribution to GDP growth. However, Change in inventories partially offset the growth in expenditures, weighting down the total GDP growth by 3.9 p.p. Net export contributed positively by 1 p.p., as imports noted a more pronounced decrease compared to Exports, resulting in an overall better net export position.
GDP growth contribution by expenditures
| wdt_ID | ||
|---|---|---|
| 1 | Total final consumption | 1,60 |
| 2 | Actual individual consumption of households | 0,00 |
| 3 | Final consumption expenditure of households | 1,10 |
| 4 | Final consumption expenditure of Non-profit institutions serving households | 0,00 |
| 5 | Individual final consumption expenditure of General government | -1,10 |
| 6 | Collective final consumption expenditure of General government | 1,60 |
| 8 | Gross fixed capital formation | 2,30 |
| 9 | Change in inventories | -3,90 |
| 11 | Net export | 1,00 |
| 12 | Export of goods and services | -0,30 |
| 13 | Import of goods and services | -1,30 |
| 14 | GDP | 1,00 |
Source: Romania National Institute of Statistics, InterCapital Research
Last week we wrote about expectations published by the World Bank, where they estimated the Romanian GDP to grow by 1.8% YoY in FY 2023. The growth should come on the back of private consumption as well as EU funds’ aided investment. This outlook depends on several factors, including the extent and duration of the war in Ukraine, as well as its repercussions on the European economy, combined with the fluctuations in global prices and domestic inflation. Furthermore, Romania’s ability to efficiently absorb the EU funds will be critical for future growth in the upcoming years. So far, the current H1 growth of 1.7% is in line with the World Bank’s expectations.
World Bank current key indicators and forecast for Romania (2022 – 2025, %)
| wdt_ID | Indicator | 2022 | 2023e | 2024f | 2025f |
|---|---|---|---|---|---|
| 1 | Real GDP growth, at constant market prices | 4,70 | 1,80 | 3,70 | 3,90 |
| 2 | Private consumption | 5,50 | 3,70 | 4,50 | 4,80 |
| 3 | Government consumption | 4,30 | 2,90 | 1,40 | 1,20 |
| 4 | Gross fixed capital investment | 8,00 | 7,90 | 7,20 | 7,50 |
| 5 | Exports, goods and services | 9,60 | 0,70 | 5,80 | 6,30 |
| 6 | Imports, goods and services | 9,90 | 1,20 | 7,50 | 8,00 |
| 7 | Inflation | 13,80 | 10,10 | 5,40 | 4,20 |
Source: World Bank, InterCapital Research
