GDP misses return to growth by 0.5%

The economy fell by merely 0.5% in the second quarter compared with the same time of last year so that even though it did not step into the black again, it at least managed to slow down its decline from about 9% in the spring of 2009.
According to informative data published by the National Statistics Institute (INS), the GDP witnessed a decline by 0.5% in gross series compared with the same quarter of 2009 and by 0.6% if looking at seasonally adjusted data.
Still, compared with the first quarter, the economy went up slightly by 0.3% (seasonally adjusted series) in the second quarter, owing to export growth and slight consumption rebound in June.
The trend is in line with IMF's and analysts' expectations that anticipated a temporary return of the economy into positive territory in the second quarter. There were even voices that said the growth confirmed the vision about a return to positive territory in the absence of fiscal austerity measures in 2010.
President Traian Băsescu yesterday talked about Romania having managed to post a slight economic growth, explaining, however, that it had a long way ahead of it before getting rid of the burden of the excessive budgetary spending compared with revenues that the economy provided.
The second half of the year looks like it will be much more difficult, as the effects of the 25% cut of the public sector employees' salaries and the VAT hike to 24% are due to show.
The economic growth posted by Romania in the second quarter compared with the first is among the weakest in the entire European Union.