Romania left Hungary behind in terms of Gross Domestic Product for the first time ever last year. The score was 97 to 89 (billion euros). Leaving Hungary behind in the ranking of the biggest economies in the European Union has propelled Romania to the 17th position among the 27 states in this ranking.
Only three states in the Union managed to climb in this ranking last year, each going up one place: Poland (from 10 to 9), Romania (from 18 to 17) and Latvia (from 25 to 24). Whereas Romania "beat" Hungary in terms of GDP, Poland outranked Austria and Latvia left Cyprus behind, according to the estimates of Eurostat, the EU statistics division.
How could have Romania beat Hungary? Romania posted an almost 97 billion-euro (79 billion euro in 2005) GDP, as a result of an economic growth of approximately 8% (according to the preliminary data published by the National Forecasting Commission) and of an almost 3% appreciation of the RON last year.
At the same time, Hungary posted an 89 billion-euro GDP (88 billion euros in 2005), an estimated 4% growth and a depreciation of the forint against the euro by about 6.5%. In other words, Romania's GDP was faster to grow in euros, because of the decline of the RON/EUR exchange rate, while Hungary's GDP was slower to progress because of the increase in the HUF/EUR exchange rate
Although ahead of ten EU states in terms of the size of its economy, Romania was next to last in 2006, if judging by GDP per capita, with only 4,482 euros (that is 19-20% of the European average), leaving only Bulgaria behind (3,143 euros). This is where Hungary "beats" Romania by a twice higher figure, as Hungarians' GDP per capita stood at 8,851 euros in 2006.
As for Romania's economic growth in 2006, the National Forecasting Commission (CNP) published its first estimates a few days ago, which show an 8% growth, much higher than expected last spring (6%) and above the expectations in the autumn (7%).
"The 2006 economic growth was put at 8%, based on the data available for the first eleven months, and the GDP stood at approximately 97 billion euros," Ion Ghizdeanu, CNP chairman told ZIARUL FINANCIAR.
He says Romania's over-performance was mainly driven by the better-than-expected growth in the industry and construction sectors.
According to CNP's estimates, the gross added value in the industry went up by 7.3% last year, a strong rebound from the modest 2.5% growth of 2005. At the same time, the construction market went up by 18.1% in 2006, compared with the 9.9% increase of 2005. Therefore construction had the best year ever in terms of growth pace in 2006, more than double the growth of the entire economy.
Also in 2006, services increased by 7.7%, exceeding the 2005 result. The only problem remains in agriculture, where the gross added value rose by a mere 0.5% last year, which means agriculture remained in 2006 at the disastrous level of 2005, when the yield fell by nearly 14%, because of the floods.
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