Romania 07 GDP Growth Slows On Poor Farming Output

Farming output fell 16.9% last year, as Romanian crops were extensively damaged by a severe drought in 2007, and shaved off around 1 percentage point of the country’s economic growth figure, data from INS showed.

However, the country’s full-year economic growth beat analysts’ expectations of 5.8% growth driven by the fast-growing construction sector, which expanded 33.6% in 2007.

Services and industrial output grew 10.8% and 5.1% on the year, respectively, and boosted the economy in 2007. Domestic consumption grew 10.2% on the year in 2007, showing moderate slowdown compared to 12.6% growth in 2006, the INS said.

In the fourth quarter of 2007, Romania’s GDP grew 6.6% on the year in real terms, compared with 7.7% growth in the corresponding period a year earlier.

Fourth-quarter GDP growth slowed on the year on a farming output decline of 16.5%, but exceeded analyst expectations as constructions and services accelerated 32.4% and 11.2%, respectively.

The INS said consumption grew 8.9% in the fourth quarter of 2007 compared with 9.8% in the corresponding period of 2006.

Romania’s economic growth has been robust in recent years, increasing an average 6.5% each year between 2003 and 2006. The country’s forecasting commission expects economic growth of 6.5% in 2008.