Romania’s economic growth slowed more than expected in the third quarter, weighed down by a severe drought and the energy crisis triggered by the war in neighboring Ukraine, according to Bloomberg.
The country dodged a quarterly contraction, however, surprising analysts and easing concerns about an imminent recession. Gross domestic product advanced 4% from a year earlier, compared with 5.5% seen in a Bloomberg survey. The economy advanced 1.3% compared with the previous quarter, the statistics office said Tuesday.
“We expect the economic advance to slow down visibly in 2023, to 2.3% in our baseline scenario, as very elevated inflationary pressures and the current energy crisis in Europe are likely to affect economic activities,” analysts at Raiffeisen Bank Romania led by Ionut Dumitru said in a note.
While details of the quarterly growth will be released next month, central bank Governor Mugur Isarescu said on Monday that internal consumption remains the main driver, while European Union funds and investment in infrastructure could help Romania avoid a recession.
The slower growth is one of the reasons why the central bank eased the pace of its monetary policy tightening at its latest meeting, with inflation still seen running into double digits until next year.
