Romania's Economy Grows Higher Than Expected, GDP Rise 0.7% In First Quarter

06.08.2011 By Florentina Dragu

The economy expanded at a faster pace than previously estimated in the first quarter, supported by rising exports and increasing activity in industry and retail sectors, revised figures showed Wednesday.

Gross domestic product increased by 0.7% in the first quarter, compared to a growth of 0.6% initially estimated, according to fresh data from the National Statistics Institute (INS).

A quarter earlier, the Romanian economy grew a modest 0.1%.

Compared with the first quarter of 2010, real-term GDP increased by 1.7% in January to March. Preliminary data indicated an annual growth of 1.6%.

Industry had a positive contribution of 10.1% to the first-quarter GDP, while retail, transport and telecommunications each contributed 1.1% to the economic growth.

On the other hand, services had a negative contribution of 6.1% during the first three months, while activity in the financial and real estate sectors declined by 3.2%. Construction works fell 2.4% in the first quarter from the year-earlier period.

Domestic demand inched down 0.5 percentage points in January to March, mostly due to a 3% decline in final consumption. Gross capital formation was down 2.2% on the year in the first quarter.

However, net exports rose 23.6% in the first three months from the same period of 2010, outpacing imports, which increased by 15.4% on the year, INS data showed.

Romanian authorities estimate an economic increase of 1.5% in 2011, broadly fueled by exports, after a decline of 1.3% in the previous year.

The economy slipped into recession in the second half of 2008 and remained in negative territory until the last quarter of 2010, with a few exceptions when it posted quarterly growths.