Industry picks up the pace

Industry accelerated its growth pace in the third quarter thanks to external demand, while consumption slowed down its decline, fuelling hopes that the economy may be doing better than anticipated.

New orders in the industry rose by 26% in the first nine months of the year, after an increase of 23.9% in the first half of the year, with companies in the industrial sector standing by their 10.8% turnover growth rate, show data from the National Statistics Institute.

In parallel, sales in the wholesale sector slowed down their rate of decline from 5.1% in the first six months to 4.9% between January and September. The slower turnover decline in the industry is more likely to have occurred because of higher inflation in the wake of the VAT hike from 19% to 24% than because of a consumption revival. "The progression of these indicators suggests we could see a less significant economic contraction in the third quarter than anticipated. The GDP decline that occurred between July and September could be somewhere between -1% and -2%. We currently have a -2.5% estimate for the third quarter," says Nicolaie Chideşiuc, chief economist of ING Bank.

The Gross Domestic Product (GDP) saw a 0.5% decline in real terms in the third quarter against the similar period of 2009. Data on economic performance in the third quarter will be published on November 12th.