Statistics show an adjustment of the economy in the second quarter of this year at the most severe pace since the early 1990s, but the adjustment of the domestic economy in the second quarter was less severe compared to the euro area, and the recovery could come in the third quarter, according to analyzes performed by banks.
“Statistics show an adjustment of the economy in the second quarter of this year at the most severe rate since the early 1990s, a development determined by the incidence of the pandemic and the consequences of this unprecedented shock for the postwar period. Thus, GDP fell at a quarterly rate of 12.3% in Q2, after increasing by 0.3% in Q1. In year on year dynamics, the domestic economy adjusted by 10.5% in Q2 and by 4.7% in the first half of the year,” says a report signed by Andrei Rădulescu, Director of Analysis Macroeconomics, Banca Transilvania (BT).
In the central scenario, BT forecasts the growth of the domestic economy with an average annual rate of over 2.5% in the period 2020-2022, while this year’s adjustment will be offset by the advance from 2021-2022, a perspective supported by the relaxed mix (without precedent) of economic policies in implementation both at the level of the European Union and internally. According to this scenario, productive investments could increase with an average annual dynamics of over 3% in the period 2020-2022, given the low level of real financing costs, programs launched by the European Union after the incidence of the pandemic, the solid position of the domestic banking sector and the high potential for critical infrastructure development.
On the other hand, according to a report by Erste Group Research, GDP data in the second quarter stress the peak of the impact of the pandemic on the Romanian economy and the third quarter is likely to bring a strong recovery in sequential terms, followed by a normalization of quarterly rates from Q4. The recovery form in the third quarter looks less steep than the decline in the second quarter of 2020. The bank’s scenario considers that the COVID-19 epidemic is being kept under control, according to Agerpres.
In his turn, the chief economist of Raiffeisen Bank, Ionuţ Dumitru, former president of the Fiscal Council, considers that we have a severe contraction of the economic activity, and the third and fourth quarters are uncertain.
“There are still a number of uncertainties about the evolution of the economy. The second quarter was slightly better than expected, however with a severe contraction in economic activity, and the third and fourth quarters are uncertain. We do not know what will happen to the economy, but, in any case, the economic recovery will be quite difficult. Probably the budget revenues have a rather high degree of uncertainty,” said Ionuţ Dumitru.