Romania’s GDP growth in the EU’s leading platoon in Q1 2022. Forecasts are contradicted by reality

By Jerom Bolt
The signal estimates published today by Eurostat announce a different reality than the estimates of the IMF, the World Bank or the European Commission. In the first quarter of August 2022, the economies of most EU countries recorded substantial annual growth.
In Q1 2022, Romania had the highest economic growth in the EU, with an advance of 5.2% of GDP. In the EU, there was an increase of 0.4% in the first three months of this year compared to the previous quarter.
Compared to the first quarter of last year, seasonally adjusted rose by 5.1% in the euro area and by 5.2% in the European Union. In this case, too, Romania, with an advance of 6.5%, is among the countries with the strongest economic growth, along with Portugal (11.9%), Poland (9.1%), Austria (8.7% ), Hungary (8%) and Denmark (6.8%).
In the case of Romania, Eurostat data coincide with those previously published by the National Institute of Statistics, according to which the Romanian economy grew by 5.2% in the first quarter of this year compared to the previous quarter, while compared to the same period last year recorded was 6.5%.
Eurostat information is at odds with most national and international forecasts.
At the beginning of this month, the National Commission for Strategy and Forecast (CNSP) revised down by 1.4 percentage points, to 2.9%, the growth estimate of the Romanian economy for this year, from 4.3% as previously forecast.
Romania’s economy grew by 5.2% in the first three months of 2022, compared to the previous quarter. GDP rose by 6.5% compared to Q1 in 2021.
Regarding the evolution of GDP in the last quarter of last year, INS explained that on a seasonally adjusted series the volume indices were changed compared to the second provisional version as a result of the revision of the gross series by including the estimate of Gross Domestic Product for the first quarter of 2022, as well as the change of the model applied for the seasonal adjustment in the quarterly series.
The estimates published by CNSP are in line with the forecasts of the international financial institutions, which have significantly decreased the growth targets of the Romanian economy this year. Thus, the IMF recently estimated an advance of 2.2% for 2022, from 4.8% as indicated in the fall, while the World Bank indicated an even more modest growth for Romania’s GDP, of 1.9%.
On Monday, the European Commission released its spring economic forecast, which showed that after robust growth in 2021, Romania’s economy would slow to 2.6% in 2022 as inflation reduces disposable income and the war in Ukraine affects confidence in the economy, supply chains and investment.
The draft budget for 2022 was set at the economic growth of 4.6%