The economy fully felt the effects of the VAT increase and of the 25% cuts to public sector employees’ salaries in the third quarter, after the temporary rebound recorded in the second quarter, with analysts forecasting a contraction of the Gross Domestic Product (GDP) that ranges between 1.5% and close to 3% against the second quarter.
Raiffeisen Bank analysts expect a 1.5% GDP contraction in the
third quarter, while ING Bank expects the economy to fall by 2.8%
in the third quarter against the second quarter in seasonally
adjusted data, and by 4.1% in annual rate, following the austerity
measures taken.
A pleasant surprise could come as far as agricultural production is
concerned – it was good this year, and traditionally contributes a
larger share of the GDP in the second part of the year.
According to Raiffeisen analysts, statistical data announced over
the last few days for industrial production, constructions, and
trade fuel expectations of a weak GDP in the third quarter.
“We believe the real GDP contracted by around 1.5% year-on-year in
the third quarter, but a better result cannot be ruled out in case
of a good agricultural crop.”
In August, industrial production, one of the leading indicators in
the economy, climbed by a mere 0.1% against the previous month,
after the 1% decline recorded in July. So Raiffeisen analysts
expect the industry to contribute less to GDP in the third quarter
than in the second.