Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 08BUCHAREST739, ROMANIA: STRONG GROWTH CONTINUES, BUT AT AN INFLATIONARY

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08BUCHAREST739.
Reference ID Created Released Classification Origin
08BUCHAREST739 2008-09-22 09:25 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Bucharest
VZCZCXRO0124
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBM #0739/01 2660925
ZNR UUUUU ZZH
P 220925Z SEP 08 ZDK ALL CTG NUM SVCS
FM AMEMBASSY BUCHAREST
TO RUEHC/SECSTATE WASHDC PRIORITY 8715
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEATRS/DEPT OF TREASURY WASH DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
UNCLAS SECTION 01 OF 02 BUCHAREST 000739 
 
STATE FOR EUR/CE: ASCHIEBE AND EEB/IFD 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EIND EFIN RO
SUBJECT: ROMANIA: STRONG GROWTH CONTINUES, BUT AT AN INFLATIONARY 
COST 
 
BUCHAREST 00000739  001.4 OF 002 
 
 
Sensitive but Unclassified, Not for Internet Distribution. 
 
1.  (U) Summary.  Romania's economy posted higher-than-expected 
growth in the first half of 2008, prompting renewed worries of 
over-heating in the near future.  The construction, services, 
industrial and retail sectors drove the growth rate to 8.8% over the 
same period last year.  However, the impressive growth was 
accompanied by surging inflation, which at an annualized rate in 
June of 8.6% is still well above the Central Bank's target.  This 
has prompted the Central Bank to continue its policy of monetary 
tightening.  End summary. 
 
 
2.  (U) Romania's real GDP growth rate accelerated during the second 
quarter of the year to 9.3%, on top of 8.2% in the first quarter, 
reaching an average 8.8% growth rate over the first half (H1) of 
2008.  This was the best H1 growth performance in 18 years.  The 
growth was driven by a surge in construction, up a staggering 33.3% 
over the same period in 2007; services, up 7.6%; followed by 
industry, up 5.8%.  Agriculture improved from last year's 
disappointing season, when the severe drought impacted growth; H1 
production this year rose by 2.6% despite floods in some parts of 
the country.  Overall, services have risen to account for nearly 
half (49.5%) of GDP, while manufacturing accounts for 26.5%, 
construction 8.1%, and agriculture 3.6%.  Statistics show robust 
economic expansion across the board, with household consumption 
increasing 11% compared to the same period in 2007.  The growth in 
the formation of fixed capital was 7.8%.  In nominal terms, 
Romania's H1 2008 GDP amounted to the equivalent of USD 81.9 
billion. 
 
3.  (U) This strong growth trend has, not surprisingly, been 
accompanied by rapidly rising prices.  Given the June-thru-June 
annualized 8.6% inflation rate, analysts now expect a final 2008 
annual rate of between 7.5% and 8%.  This would be more than double 
the Central Bank's target of 3.8% plus or minus 1% and a 
substantially worse performance than the 2007 rate of 6.6%.  In H1, 
service sector inflation posted the highest increase at 3.78%, 
chiefly due to rising public utility costs.  Food prices followed 
closely behind, up 3.68%.  Only non-food items were below the 
average, up 3.37%.  Despite several consecutive hikes of the 
benchmark interest rate, and high minimum reserve requirements, the 
Central Bank has not yet succeeded in taming inflation.  Main 
factors in the inflation surge were higher international fuel 
prices, which have had a direct impact on transportation costs; 
persistent consumer demand, due to rising incomes; and residual 
tensions in the agricultural market as a result of several years of 
poor yields.  Because one factor keeping inflation from rising even 
faster has been the leu's previous appreciation against the euro, 
worries remain with regard to the future forex rate trend. The 
practice of denominating (and borrowing for) big ticket purchases in 
euros could drive further inflation if the leu were to markedly 
depreciate and the price of these goods were to rise commensurately. 
 
 
4.  (U) Despite higher-than expected inflation in the first half of 
2008, initial reports for July and August indicate that a slight 
deceleration may have begun.  Prices actually declined in August by 
0.09%, prompting the August-thru-August annualized inflation rate to 
drop to 8.0%.  Still, the main challenges for controlling inflation 
in the second half of the year will include real salary gains 
compared to labor productivity, expected growth in public sector 
spending during the election cycle, uncertainties related to 
international fuel prices, and the upward trend in 
government-controlled prices (i.e. utilities, transport, and social 
insurance expenditures).  Robust economic growth and labor 
emigration continue to push domestic incomes higher, which in turn 
should continue to support retail consumption at today's high 
levels.  However, unpredictable fuel prices will likely have the 
most pronounced effect on the final inflation rate for 2008. 
 
5. (SBU) Comment. Despite the high inflation headlines and, in some 
respects, the appearance of a bubble economy, the underlying 
economic trends appear to be setting Romania up for a slowdown, 
rather than a spectacular crash.  The high growth in the first half 
of 2008 revived old worries of a "hard landing" for the Romanian 
economy.  However, post believes a more likely scenario is a modest 
slowdown in growth from the currently unsustainable 8.8% to around 
5-6% in 2009.  Inflation appears to have already slowed somewhat in 
July and August, while Romanian exports have been growing at higher 
rates than imports.  Moreover, foreign investors' appetite for 
exposure to the Romanian economy remains steady, with an increasing 
share of the current account deficit being financed by foreign 
direct investment despite world financial market turmoil. 
Additionally, reports of layoffs, especially in the construction 
sector, in the weakening economies of Western Europe may evenually 
offer some wage relief in Romania.  Large numbers of Romanian 
 
BUCHAREST 00000739  002.2 OF 002 
 
 
expatriates are employed in Spain and Italy, and if deteriorating 
conditions there prompt even some of these workers to return home, 
this would help to further moderate wage inflation.  It would also 
assist in keeping foreign investors, who are on the lookout for 
investment opportunities far away from Wall Street's financial 
turmoil, interested in Romania.  End Comment. 
 
Taubman