Consumption drives Q1 growth to 5.9%

The Romanian economy grew by 5.9% in the first quarter of the year compared with the same period last year. This growth was mainly the result of performance in the services sector and in industry, as well as a 12.1% higher rate of consumption compared with the first quarter of 2004.

In line with preliminary data released by the National Statistics Institute, the estimated value of first-quarter gross domestic product (GDP) climbed to 497,251bn ROL (about 13.8bn euros), 5.9% higher in real terms against the first three months last year.

The available data identifies the performance of the services sector as the most dynamic factor behind the growth, growing 6.8% on the same period last year.

Industry performance also improved, increasing 5% on last year.

Consumption saw a 12.1% increase on last yeara??s first-quarter level, while fixed capital formation rose 5.2% in the same period.

The authorities have set their growth target for the economy for this year at 5.5%-6%, down from the 8.3% seen last year. While some analysts have predicted that the recent floods would affect the growth target for the economy this year, government officials say a poor harvest this year in some areas would not have any significant consequences for overall economic growth.

Investments in the economy were slower to increase, exceeding the level of the first quarter of 2004 by only 4.8%, for a total of 50,202bn ROL (some 1.4bn euros). miruna.lebedencu@zf.ro