UPDATE 1 - Romania's GDP grows 3.4% in 2013 - near final data

Romania's GDP totalled 637.6 billion lei ($174.8 billion/142.6 billion euro) in current prices last year, INS said, citing near final data.

The latest GDP growth figure for 2013 is 0.1 percentage points lower than the previous one, released by INS in April.

Romania's agricultural sector expanded 29.2% last year, the industrial sector rose 3.8% and the construction sector grew by 5.3%.

Final household consumption rose 1.1%, while gross fixed capital formation fell 7.9%. Exports grew 16.2%, outpacing imports, which increased by 4.2%.

Commenting on the figures, Raiffeisen Bank Romania said in a note to investors that even though the overall GDP growth rate differed only slightly from the previous figure, the revisions at the component level provide very large surprises.

"For example, on the supply side, the previous release showed that industry was the main driver of the GDP growth in 2013 with a dynamics of 23% yoy (and a contribution of 5.6 pp to the real GDP advance of 3.5%), but today’s data no longer supports such an idea."

Gross value added in industry increased by only 3.8%, resulting in a contribution of only 0.9 percentage points (pp) to the annual dynamics of real GDP.

Also, other components recorded several important revisions: gross value added in construction sector is now in positive territory, with 5.3% growth, after initial figures showed a 0.5% contraction, and the drop in gross value for retail sales was notably revised downwards from 32.6% to 6.2%, among others.

"Large revisions in the components of real GDP, both on the demand and on supply side, reduce the reliability of the picture painted by these data on trends in the economy at the sector level," Raiffeisen Research Romania added.

Romania's GDP expanded by 2.8% in the first nine months of 2014, mainly due to a strong performance of the industrial sector. The government targets economic growth of 2.5% for next year.

(1 euro = 4.471 Romanian lei)