According to the latest report on the Romanian GDP, in Q1 2024, it grew by 0.4% QoQ, and 1.8% YoY, amounting to RON 416.3bn, or EUR 83.6bn.
Last week, the Romanian Statistical Office released its first detailed report on the movements of the Romanian GDP, for Q1 2024. During the quarter, the Romanian GDP amounted to RON 416.6bn at the current prices. In real terms (and working days and seasonally adjusted) this represents an increase of 0.4% QoQ, as well as 1.8% YoY.
Seasonally adjusted quarterly YoY GDP development (Q1 1996 – Q4 2024, %)
Source: Romanian National Institute of Statistics, InterCapital Research
Breaking the GDP change down by categories, information, and communication, with 8.9% of GDP, recorded volume growth of 2%, leading to 0.2 p.p. contribution to YoY GDP growth. Shows, culture and recreation activities; repair of household goods and other services, with a share in GDP of 2.6%, also contributed 0.2 p.p. due to a 7% volume growth. Next up, public administration and defence; social insurance of the public sector; education; health and social assistance, with a share of 15% of GDP, recorded 0.9% volume growth, leading to a 0.1 p.p. GDP increase. Lastly, net taxes on products, with an 8.3% share in GDP, recorded a volume increase of 6%, leading to a 0.6 p.p. increase in GDP. On the other hand, Industry, which has an 18.3% share in GDP, recorded a 1.1% volume decline, leading to a negative 0.2 p.p. contribution to GDP change YoY.
Furthermore, looking at the more used breakdown of GDP (consumption, gross fixed capital formation, etc.), the final consumption expenditure of households contributed 2.2 p.p. to GDP growth, due to a 3.3% increase in volume. Individual final consumption expenditure of General Government, whose volume increased by 3.9% YoY contributed 0.3 p.p. to the GDP growth rate. Collective final consumption of General Government also recorded similar growth rates, with a 4% volume increase, leading to a 0.4 p.p. GDP growth. Next up, gross fixed capital formation contributed 1.3 p.p. to GDP growth rate, due to a 6.6% increase in volume.
On the other hand, the only category that negatively contributed to GDP this quarter was the net exports, which declined by 4.8% in volume, leading to a -2.6-p.p. contribution to the GDP. This came due to lower export of goods and services, while the import of goods and services grew.
Overall, the Romanian GDP is growing a little slower than expected in Q1, in line with other EU member states. Of course, the country is affected more by higher inflation rates due to the usage of its currency as opposed to the Euro, which for sure contributed to slower growth rates. However, consumption remains strong (and the primary driver of GDP growth), and as inflation is expected to become less and less impactful in the coming quarters/years, faster GDP growth could be expected to occur.
