RO: Full year 2024 GDP growth confirmed at +0.9%
The publication of the structure of the GDP growth in 2024 brings no major data revisions. The 4Q24 growth remains at +0.8% q/q and +0.7% y/y. The full year 2024 GDP growth stands at +0.9%, decelerating from +2.4% in 2023. Looking at the structure the picture is quite clear. Consumption was strong in 2024 but it mainly fueled imports. Exports were not great due to weak external demand and as a consequence net exports offset most of the positive contribution coming from consumption. On the supply side weak services, neutral industry and a negative contribution from agriculture are the highlights. The nominal GDP growth stands at 10.1% in 2024, implying a GDP deflator of 9.2% vs 13.1% in 2023.
We keep our forecast of +2.0% GDP growth in 2025 but we see risks rather titled to the downside. The announced fiscal consolidation will most likely weigh in on consumption which we see decelerating significantly in 2025. Investments will be a key driver for this year growth story and will be very important to follow the EU Funds absorption. The strong negative effect from net exports should be less severe this year, either due to improved external demand or base effects combined with weaker domestic consumption.
On the supply side, agriculture minor positive contribution of +0.1pp to the +0.7% y/y growth the last quarter of 2024. Services added 0.5pp and net taxes 0.7pp. Industry added 0.2pp while construction subtracted 0.7pp. Looking at the full year 2024 +0.9% GDP growth, agriculture and construction had a negative influence of -0.4pp and -0.2pp respectively. At the same time, services added 0.6pp and net taxes 0.9pp. Industry contribution was neutral.
On the demand side, private consumption added 3.4pp to the +0.7% y/y growth rate in 4Q24. Investment subtracted 3.3pp and public consumption subtracted 0.7pp. Net exports took away 2.8pp of the annual growth rate while inventories added 4.1pp. Looking at the full year 2024 picture we see private consumption adding 3.4pp to the +0.9% GDP growth and public consumption had a negative contribution of -0.2pp. Net exports had a -2.9pp contribution and investment -0.4pp. Inventories added 1pp.