The official figures show Romania’s economy is facing a technical recession, after the gross domestic product suffered two successive quarterly declines. Wall-Street outlines the evolution of wages in the toughest quarter of the post-communist history and how the weak economic performance is affecting currency exchange and stock market.
Wages grow 16.7% while economy shrinks 6.4%
The first three months of 2009 had seen a 6.4 decline in GDP in Romania from prior-year quarter, following deeper economic crisis across the world. As compared to fourth quarter 2008, Romania’s economy fell 2.6% in Q1, 2009.
As seasonally adjusted data show, in second and third quarter 2008, the Gross Domestic Product climbed 0.3%, and 0.4% respectively. In fourth quarter 2008 the GDP suffered a decline from Q3 of 3.4%.
Practically, Romania had seen its economy marking two successively quarterly declines, which can be translated into technical recession.
The average net wage stood at 1371.6 lei (320 euros) in first three months, up 16.7% from 1175.3 lei (319 euros) a year earlier, the National Statistics Institute found. When expressed in euro, the growth in average net wage in Q1 2008 compared to prior-year period is insignificant due to the currency exchange gaps.
Wage increase in Q1 is 23.1% higher than the growth of Romania’s economy, which dropped 6.4% in first quarter. “At a macroeconomic level, the salary increases in first quarter may seem abnormal with the GDP falling, but at a business level, things are not the same. Salary rises in a company are given according to the business’ performances and less according to the economic context”, said Ana Giurca, business development manager at HR company Catalyst Solutions, organizer of Top Employers job fair.
Even if economy faced a major slump in first quarter, wages climbed 3.6% in lei, from 1335
