Last month, Economy and Finance Minister Varujan Vosganian estimated Gross Domestic Product (GDP) growth would stand at 7.5 percent in the first quarter, Ziarul Financiar reported.
The surge comes as a surprise, considering it happened in the wake of difficult international conditions, whilst domestically, the NBR also made efforts to put a damper on consumer spending, after the bank raised the monetary policy rate.
The performance of the Romanian economy in the first three months of the year was among the top-five GDP growth rates registered since 1990, only exceeded by 9 percent leaps in the second half of 2004, as a result of the very good agricultural yield registered during that year. Gross Domestic Product also advanced by 8.3 percent in the third quarter of 2006. Agricultural yields are expected to be good again this year, and should at least compensate for the effect of the drought in 2007, which fuelled the increase in food prices as well as massive grain imports.
After the surprise growth in the first quarter, analysts now believe they must reconsider their outlooks for Gross Domestic Product performance this year. On the other hand, although the economy is showing signs that it will continue to grow by around 8 percent this year, forecasts for 2009 remain rather bearish.
"We should not delude ourselves. I believe that we benefited from a strong base effect in the first quarter, both in terms of tax collection an in terms of generated electrical power," comments Lucian Anghel, BCR's chief economist. His was the most bullish forecast of all the local analysts, which anticipates GDP growth of 7.8 percent in the first quarter.
The Gross Domestic Product amounted to 86.74 billion RON (23.5 million euros) in the first quarter), according to the National Statistics Institute.
The detailed data about the GDP structure for the first three months will not be available until Thursday.
The National Forecast Commission chairman Ion Ghizdeanu explained that GDP growth for the whole of 2008 could be higher than previously estimated. "First quarter results were very good. Investments were the decisive factor here, as has been the case over the last two or three years. This is something that aids sustained economic growth," Ghizdeanu added.