August 31, 2004
Still! More! Good economic news
Romania's GDP growth rate for the first half of 2004?
6.5%. That's expected to slow in the back half of the year, but the annual growth rate should still be 6% or more.
That's a lot. 6% growth is better than the US or any country in Western Europe. 6% growth will double the country's gross product -- and, presumably, its wealth and income -- in just twelve years.
Okay, it's very unlikely that these growth rates will be sustained. A fair chunk of this year's growth will come from a really good harvest; Romania's economy is still heavily agricultural, so good weather accounts for 1-2% of that figure. Another big driver is rising global prices for certain sorts of product. The Chinese economy is demanding vast quantities of cement, scrap metal, simple electrical engines, rebar, wire; as it happens, these are just the sorts of things that Romania produces in quantity. That's good news for Romania's manufacturing sector, but it won't last forever.
And there are legitimate concerns about how well the growth is being distributed; more and more, it's looking like boom times for people at the top, not bad for those in the small middle class, but little or slow progress for the majority of Romanians. And even if the 6% is maintained, it will take Romania many, many years to catch up to Poland or Hungary, never mind France or Britain.
Still... it's an impressive achievement.
More on this in a bit.
Posted by douglas at August 31, 2004 02:39 PM