Romanias economy unexpectedly avoided entering a technical recession in the fourth quarter of last year as GDP rose a seasonally adjusted 0.2% from the previous three months, after posting a 0.4% decline in the third quarter, and grew 0.3% from the year-earlier quarter, the National Statistics Institute in Bucharest said in a flash estimate, newswires reported. 
The median estimate of six economists surveyed by Bloomberg was for a 0.1% quarterly contraction, which would mean two consecutive quarters of negative growth, putting it in a technical recession.
Until the first detailed GDP reading is out three weeks from now, analysts said it must be assumed that domestic demand was the main upward driver, with destocking likely easing its negative impact. "We also do not completely rule out a marginal positive contribution to GDP formation coming from external demand, bearing in mind that imports fell more quickly than exports in y/y terms," Erste says.
The news strengthens hopes that Romania's economy will put in better growth than the meager 0.2% seen last year because of a poor harvest and slowing export growth amid Europe's debt crisis.
"We still see the Romanian economy inching up about 1% in 2013, while trailing behind its potential, now estimated at 1.6%. The cabinets decision to hike public wages and pensions as of January 2013 and perhaps further increases in the second half of the year could help private consumption get a second wind," Erste says.
Source: bne