Romanians are among those with a high degree of savings of the eight countries in Central and Eastern Europe (Hungary, the Czech Republic, Austria, Poland, Slovenia, Slovakia, Croatia and Romania), being surpassed only by Austria, according to a study made by Erste Bank.
This is despite the fact that, according to a survey carried out last year, 30% of Romanians stated that their incomes are too low in order to save and live “from day to day”, the differences in incomes being the largest in CEE.
How European households invest savings:
The most investments in shares and mutual funds are held by Estonians – approximately 70% of savings.
Considering our region, the most “advanced” of investors seem to be Hungarian households, holding nearly 50% of their financial assets in shares and mutual funds.
On the other hand, Poland, Slovakia and Croatia seem the most conservative since local households hold nearly 50% of their financial assets in deposits. The heavy emphasis on large bank deposits reduces the potential yields of these assets. Croatia also stands out through significant investments in pension funds.
Romanians are also conservative in terms of savings structure, favoring bank deposits, government securities and private pensions.
The gross savings rate is dispersed independently of assets structure. However, high inflation and worsening real income have a high impact on the data, causing high volatility in the statistic, shows the study by Erste.
Romanians invest savings in deposits, government securities and pension funds
The population continued saving at a sustained pace in 2023, according to the NBR Annual Report. Financial assets holdings increased by 1% in 2023 (real terms annual variation), while their share in total assets went up to 63% (+1 percentage point compared to 2022).
Private pension funds and government bonds issuance programs “Tezaur” and “Fidelis” supported this evolution. Deposits followed the upward trend, but at a slower pace compared with other financial assets (+4,7%, in real terms, in 2023).
Romanians, the least indebted in CEE
In terms of lending, households in Romania, Hungary and Poland remained the least indebted in the region, while households in the Czech Republic and Slovakia are among the most indebted.
Moreover, loans and other debt per capita have gone up in the last two years in these two countries, unlike in Hungary, Poland and Romania, where the degree of indebtedness has not shifted noticeably.
Bad loans did not increase during the energy and inflation crisis of 2022-2023
The share of loans for which borrowers default on their financial repayment commitment in accordance with their contractual agreements has not gone up in 2022 – 2023, unlike during the Great Financial Crisis of 2009. Despite rising living costs driven by high inflation and rising interest rates, it would appear that households continued to repay their loans, as shown by the relatively low share of banks’ bad loans. The limited impact of the economic slowdown on the labor market (that is, no substantial increase in unemployment) has contributed to resilience to shocks.
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