Romania reports a conservative 0.8% increase in GDP in 2024, according to statistical data.
Rewritten Article:
Romania's economy expanded by 0.8% in real terms in 2024, reaching an estimated RON 1,760.11 billion at current prices, as revealed by data published by the National Institute of Statistics (INS) on April 10. Let's delve a bit deeper into this growth spurt.
The growth was primarily fueled by an uptick in public sector salaries and a surge in consumption, albeit dampened by a slump in certain sectors. The public sector wage hikes contributed a modest +0.1% to the GDP growth, with household and government spending driving a chunkier +0.8%.
Trade & tourism was another key driver, contributing +0.3% to the growth. However, the IT sector, despite registering a growth of +0.3% in activity volume, failed to boost value added (salaries/profits) due to the withdrawal of tax incentives.
Alas, this expansion was not without its downsides. Agriculture, construction, and real estate all took a hit, pulling the growth down by a combined -0.5%. Fixed investments plummeted by a whopping -17.9% YoY in Q4, and net exports weakened due to dwindling external demand.
It's worth noting that this growth occurred in conjunction with a monumental public deficit of 9% of GDP in 2024, thanks to election-year spending. Capital inflows remained crucial, as the current account deficit reached an equivalent 9% of GDP.
This consumption-led growth, while impressive, masks underlying structural issues. Stagnant industrial output and fiscal imbalances continue to lurk in the shadows. So, while we're celebrating the growth, it's important to remember that a more balanced, sustainable approach is needed to ensure continued economic prosperity.
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- The estimated GDP growth in Romania for 2024, at RON 1,760.11 billion, is expected to increase further, especially in the industry and finance sectors, due to the surge in consumption and public sector salaries.
- The finance sector in Romania might experience significant growth in 2024, as the public deficit reached a substantial 9% of the country's GDP, with capital inflows being crucial to cover the current account deficit.
- Despite the increased GDP in Romania in 2024, there are concerns about the sustainability of its growth, given the stagnant industrial output and fiscal imbalances, with a more balanced approach being essential for continued economic prosperity.
