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BUCHAREST (Romania), August 12 (SeeNews) - Romania's annual economic growth accelerated to 6.0% in the second quarter of 2016 from 4.3% the quarter before, reaching it's highest growth rate since the third quarter of 2008 and exceeding significantly market expectations, unadjusted data from the country's statistics board, INS, showed on Friday.
In the first half of the year, the country's gross domestic product (GDP) rose by an annual 5.2%, INS said in a flash estimate.
On a seasonally adjusted quarterly comparison basis, Romania's GDP rose by 1.5% in the second quarter, at the same rate as in the preceding three months.
Commenting on the figures, ING Bank analysts said that the growth is well above their call/market consensus of 4.1%-4.4% year-on-year.
"Maintaining the same momentum (highlighted by the QoQ rate) is even more impressive as we believe first quarter results were likely boosted quite a bit by higher household spending following the lower headline VAT starting January 16 given that some purchase decisions might have been delayed ahead of the tax cut," ING said in a daily comment on financial markets.
It is likely that private consumption stole the show again in the second quarter of 2016, possibly with some help from inventories, they added.
On the supply side, private services are likely to have remained the main source of growth, with agriculture and construction also possibly supporting growth.
"Such brisk expansion rates highlight the need for monetary policy tightening sooner rather than later in our view, with our current call for in the first quarter of 2017 to mark the start of the policy “normalisation” process. For now, such data remains largely neutral for RON markets," ING concluded.
Raiffeisen Bank analysts also said that the figures are well above their expectations as they were looking for an expansion of 0.9% quarter on quarter and 4.1% year on year.
"This jump above expectations should have been driven by domestic demand. Given the economic advance recorded in the first half of 2016, our GDP growth forecast for 2016 of 4.0% on the year seems quite pessimistic and we are likely to revise it upwards in the upcoming period," Raiffeisen analysts said in a daily market report.
For their part, Romania's Banca Transilvania analysts said that the figures were in line with its scenario, saying that thedevelopment was driven by internal demand dynamics, supported by a mix of eased economic policies. The bank maintained its forecast of 4.8% GDP growth for Romania in 2016, based on expansion of private consumption and investment by 6.9% and 6.6%, respectively.
"For 2017 and 2018 we expect economic growth to slow to a potential pace of 4.3% and 4%, respectively," they added.
Romania's national output expanded by a real 3.8% in 2015, speeding from a revised 3.0% in 2014.