Constructions outpace agriculture

Constructions have outpaced agriculture in terms of share of GDP in the first nine months of the year, quite the opposite of last year’s situation, according to the National Statistics Institute. The share of constructions in the Gross Domestic Product shot up to 7.4% by the end of September, whereas the market grew 34.4% in the same interval, to 19.75 billion RON (about 6 billion euros). In the first nine months of 2006, constructions had accounted for 5.9% of GDP. At the same time, the share of agriculture in GDP dropped from 7.2% in the first three quarters of 2006 to 6.7% at the end of September 2007. Production in this sector saw an 18.33% drop, to 17.8 billion ROL (about 5.4 billion euros). According to analysts, although this year’s decrease was linked to speculation, caused by drought, the trend is expected to continue in the years to come, as Romania falls into step with the other European countries, where agriculture only accounts for 2-3 percent of GDP. “The share of agriculture in the Gross Domestic Product is much higher than in other European Union states, which means that its level can only decrease. Still, this year’s drop does not point to a trend, but rather to the strong shock inflicted by drought. Constructions are booming, due to significant demand, which fuels supply, but I don’t believe the coming years will continue to bring growth exceeding 30%,” said Ionut Dumitru, chief analyst of Raiffeisen Bank. According to Dumitru, constructions will continue to hold a bigger share of GDP against agriculture in the fourth quarter of the year.