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Liviu Voinea: Despite slowdown, Romanian economy on track for targeted 2.8 year-end advance
Despite the slowdown registered in Q2 in its growth pace, Romania's economy is still on track for the 2.8 percent year-end growth target the state budget is built upon, Minister-delegate for Budget Liviu Voinea told Agerpres on Thursday.
'The all-year target is an economic growth of 2.8 percent. In H1 we have an increase of 2.4 percent in raw terms and of 2.6 percent in adjusted terms, which is even slightly higher than the one registered in mid-2013. We ended last year with an economic growth of 3.5 percent. We are on track for the 2.8 percent all-year increase the budget is built upon,' said Voinea.
The Minister-delegate for Budget mentioned that there has been a change in the structure of economic growth, with agriculture now having a negative contribution to the advance of economy, contrary to last year, when it had substantially pushed forward the GDP growth.
'Instead, consumption now has a positive contribution, after the stagnation last year. Industrial output and exports also have positive contributions. The quarterly evolution is not that important because it is influenced by seasonal, short-term factors, it's the annualized economic growth rate that really matters. We have an economic growth of 2.4 percent, which is a very good rate above the euro zone and the EU average. The economic growth pace has slowed down in comparison with, say, Q1. But this is not a decline, it's just a slowdown in the growth pace,' said Liviu Voinea.
The Finance Ministry official said that the economic growth could pick up speed in the second half of 2014 as a result of the fiscal space the authorities have to maneuver.
'The six-month budget deficit was 0.5 percent of GDP, and seven-month preliminary data suggest a budget deficit of 0.27 to 0.3 percent of GDP. There is a significant fiscal space to this year's deficit target of 2.2 percent of GDP, which will allow an increase in public investments. In the private sector, the tax break for the reinvested profit has come into effect on July 1, a measure that is supposed to boost private investments, and the minimum wage has also been supplemented, which is likely to stimulate private consumption,' explained Liviu Voinea.
In Q2 2014 the gross domestic product was 1 percent down in seasonally adjusted series from Q1 2014, but on an annual basis, the Romanian economy saw a growth of 1.4 percent (expressed as seasonally adjusted series), according to the flash estimates released on Thursday by the National Statistics Institute (INS).
Expressed as raw series, the GDP advanced 1.2 percent in Q2 2014 from Q2 2013.
'In H1 2014, the GDP increase compared to H1 2013 was 2.4 percent as raw series and 2.6 percent as seasonally adjusted series,' reads the cited INS release.