Romania’s economy grew by 5.8% in the first 6 months of this year, according to data provided by the INS on Wednesday. The growth in the second quarter is a bit of a surprise, as many macroeconomic indicators did not look good at all

GDP is a unit of measurement of economic activity Evolution of the economyPhoto: sxc.hu

In the second quarter of 2022, compared to the previous quarter, GDP increased by 2.1%, and compared to the corresponding quarter of 2021, GDP increased by 5.3%, statistics also show.

  • Population consumptionas measured by retail trade (which accounts for 70% of GDP), slowed in the first half to 5.2% (from 5.7%) amid high inflation, which is forcing people to be more cautious when shopping and making purchases. In a BRD report to investors, it shows that household consumption is increasingly ending due to the depletion of savings due to the pandemic, reduced purchasing power, significantly tighter financial conditions and increased uncertainty. Therefore, the document also notes, it may be difficult for this private consumption to maintain positive dynamics, especially if there are changes in taxation and conditions on the labor market deteriorate..
  • Industrial production it also declined slightly in the first half of the year, with negative monthly figures. In June, the reduction was almost 5% compared to May 2022. The manufacturing sector faces a number of obstacles – from a noticeable slowdown in economic activity in the Eurozone (the main export destination) to the war in Ukraine, which exacerbates existing problems (lack of components, prices for raw materials, etc.). for key industries such as automotive and related industries.
  • Construction activity slowed down quite a lot in the first 4 months, after May a timid recovery was recorded (although engineering constructions still remained in the red). This cannot be forgotten rising costs of living, interest rates, and housing prices, in turn, affect the demand for housing.
  • Instead, the lifting of pandemic-related restrictions in early March 2022 contributed to accelerated dynamism services market intended for companies (25% growth in the first 5 months) and intended for households (almost 40% growth in the first 5 months).

Latvia, Lithuania and Portugal experienced economic contraction in the second quarter, Eurostat data showed, while Germany recorded economic stagnation (0% growth).