Boston, MA -- (ReleaseWire) -- 01/01/2013 -- BMI View: Romania's economy as a whole is estimated to have grown by 1% in real terms during 2012, according to our Country Risk team's latest macroeconomic outlook; however, it is thought that the construction sector outstripped the economic growth rate. Underpinning our continued relative optimism for the sector, activity in the local construction market expanded by 5.1% year-on-year in August 2012 (and 2.8% month-on-month). As such, we estimate that Romania's construction market expanded by 5.7% in real terms over 2012, marking an improvement from the 3.1% growth recorded in 2011 and the 12.1% real contraction experienced in 2010. Over the period 2013 to 2016, we expect that Romania's construction market will expand at annual rate ranged between 5.1% and 6.1%, while the period 2017- 2021 will see continued annual growth of around 5% in real terms, making for a reasonably auspicious long-term outlook. Risks to our construction sector forecasts are to the downside, in view of slightly weaker-than-expected economic growth and a renewed uptick in inflation, which reached an annual 3.9% in August 2012.
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Key developments over the last quarter:
- In September 2012, Italian renewable energy company Enel Green Power announced that it had connected the 48 megawatt (MW) Moldova Noua wind farm in Romania to the national electricity grid, reports Power Technology. The facility will generate 130mn kilowatt hours (kWh) and reduce carbon dioxide emissions by 70,000 tonnes. Enel Green Power now has a portfolio of Romanian wind farms with an overall production capacity of 292MW. The company is also developing a further 206MW of new facilities within the country.
- In October 2012, GDF Suez Energy Romania announced that it would finish building a EUR75mn wind farm in the country by early December 2012. Beyond this 48MW facility, the Romanian subsidiary of France's GDF Suez was also looking into the viability of additional projects, according to local CEO Eric Stab.
- Bulgaria's Prime Minister Boyko Borisov expressed his confidence in October 2012 that the Calafat-Vidin bridge connecting his country to Romania by road and rail across the Danube would be completed by May 2013 at the latest. His announcement followed a helicopter flight he took across the bridge with his Romanian counterpart Victor Ponta, against a backdrop where there have been significant delays to completion, which had originally been scheduled for December 2010. Complications on the Bulgarian side of the construction process, which then had ramifications for the work on the Romanian side, were the key factors behind the delays.
The duration of the project has spanned terms in office for five prime ministers in Romania. -
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