WOOD Flash - Romania macro: 2Q GDP far above the consensus

The GDP in Romania expanded, on an annual basis, by 5.30% in the second quarter of 2022, for both the unadjusted and the seasonally-adjusted series. On a quarterly basis, the GDP increased by 2.1% compared to 1Q22. This is a very good performance, especially because it builds on the very good qoq growth of 5.1% in 1Q. It eclipses the range of consensus estimates, which recorded a median of a 0.2% GDP growth contraction during this quarter (mean -0.4%; high 0.4%; low -1.7%). Therefore, we have upgraded our 2022E GDP growth forecast to 6.5% and we keep next year’s growth unchanged, at 2.4%. This puts Romanian GDP growth at the top of the WOOD universe this year. The potential downward risk for this forecast comes from a significant slowdown, driven by disruptions in energy supplies from Russia during the rest of 3Q22E and 4Q22E. Nonetheless, even in this scenario, we maintain our view that Romania is among the best-placed countries within our coverage to sustain this, as it has the lowest direct and indirect dependence on Russian energy (especially from the natural gas perspective) among the CE4.