Romania’s economy in recession again

Romania’s economy contracted with 0.1 percent in the first quarter compared to the period October-December and went into recession, so this is the second consecutive quarter of decline compared to previous months, according to data from the National Institute of Statistics (INS).

The evolution was anticipated by analysts, who estimated though a slightly larger contraction of 0.2 to 0.3 percent.

"Gross Domestic Product (PIB) in the first quarter of 2012 was, in real terms, smaller with 0.1 percent compared with the fourth quarter 2011 (seasonally adjusted)", announced the National Statistics Institute on Tuesday in a statement.

Compared to the same quarter of 2011, Gross Domestic Product (PIB) grew with 0.3 percent on gross series and with 0.8 percent on seasonally adjusted series.

These are the first estimates of economic development in January-March, called "data signal".

INS will announce on June 6 the provisional data on PIB in the mentioned period.

As in last year's fourth quarter PIB also contracted with 0.2 percent as seasonally adjusted series compared to July-September period, the economy is considered in technical recession, situation which reflects two consecutive quarters of decline compared to the previous quarter.

Thus, Romania reenters in technical recession, situation in which it was recovered for two years and a half in the period 2008-2011.

Analysts anticipated the entry into recession, their views converging to a PIB decrease seasonally adjusted in the first quarter compared with the previous quarter of -0.2 -0.3 percent.

Analysts' estimates place the economic growth from this year in about 1 percent, below the level forecast by the International Monetary Fund (FMI) of 1.5 percent.

Last year, PIB grew with 2.5 percent, supported mainly by the developments in agriculture, with a plus of 11.3 percent, and in industry sector which registered an advance of 5 percent.

Translated by Alexandra-Diana Mircea
MTTLC, Bucharest University