The figures published by the National Institute of Statistics (NIS) this morning also show the rebound of the industrial production in Jan, with the volume increasing by 2.0% M/M (following the contraction by 1.2% M/M in Dec), the strongest pace since Jun 2024. This evolution was determined by the rebound of the manufacturing, up by 2.0% M/M. The energy & utilities and the mining & quarrying climbed by M/M paces of 0.7%, and 1.6%, respectively. In Y/Y terms the volume of the industrial production contracted by 2.5% in Jan, as the manufacturing declined by 2.3%, while the energy & utilities decreased by 4.8%. On the other hand, the mining & quarrying rose by 1.1% Y/Y in Jan. The increase of the volume of production of capital goods for the second month in a row in Jan (by 1.8% Y/Y) expresses prospects for the gradual improvement of the investments in the economy in the coming months, after the severe contraction in the last quarter of 2024. There can be noticed the increase of the volume of production in the pharmaceutical industry by 21.3% Y/Y in Jan. On the other hand, the volume of production in the textile industry contracted by 24.9% Y/Y at the beginning of 2025.
Our view: according to our econometric estimates, the annual pace of the volume of industrial production stood above its potential for the seventh month in a row in Jan. This evolution expresses prospects for the rebound of industrial production in the coming months, after the volume contracted for three years in a row. In our recently revised core macroeconomic scenario the gross fixed capital formation in Romania may increase by average annual paces of 3.1% in 2025, 3.3% in 2026, and 3.5% in 2027, following the contraction by 1.7% in 2024. This scenario is supported by several factors, including the recent changes in terms of the EU industrial policy (with a focus on militarisation) and the continuity of the programs to develop the critical infrastructure in Romania | NEUTRAL
