Romanians’ financial assets, namely the deposits, cash, bonds, shares and investment funds they own, amounted to 30% of GDP in 2023.
Although the percentage is small even in comparison to the region, it still seems significant enough to state that these private savings could constitute an engine for the development of Romanian economy – if the structure were not disproportionately leaning towards deposits (of which not even banks are in need anymore).
In Romania, the ratio between loans and deposits is around 70%, while the European average is over 100% – in other words, EU banks granted loans larger than the value of the savings attracted (108.6% in Q3 of 2023).
Romania’s „conservative” position translates to local banks depositing in August 2024 a daily liquidity surplus of RON 37.6 billion with the NBR, a considerable decrease against July, when the daily average was RON 45 .5 billion.
Italy’s former Prime Minister Mario Draghi warned in a report on European competitiveness that a big problem for the continent is the transformation of the population’s savings into productive investments. That is, the use of existing financial resources of the population to finance innovation and increase competitiveness.
Stagnating money vs. productive money: Distribution of Romanians’ financial assets of compared with other countries
As revealed in the graph below, presented by BCR CEO Sergiu Manea during a conference held by CursDeGuvernare.ro, indicating financial assets relative to GDP, deposits are the most significant financial asset of households in Romania, with a share of 21.1% of GDP and almost 70% of the selected assets portfolio.
Cash ranks second at the level of 2023, 2022 respectively, in the case of Austria and Bulgaria, according to Eurostat data.
Note: Data for Austria and Bulgaria are from 2022
The large share of cash seems to be a regional trait. In Poland, cash represents almost one fifth of the selected financial assets. Hungarians have a similar share of cash in total, but it ranks only fourth, after investments in bonds and funds.
Compared to the Poles, Romanians stand out due to a slightly higher share of listed stocks holdings in total selected assets (however, in terms of GDP share, the Poles surpassed us, with 3% compared to 2.1%). Romanians’ bonds (state lending) also exceed those held by Poles: 1.5% of GDP compared to 0.6% of GDP in Poland.
On the other hand, investment funds in Poland attracted resources of 4.2% of GDP from the population, more than three times than funds in Romania (1.3% of GDP).
Hungarians and Italians save their money by lending to their states: high shares of bond holdings
Hungarians hold bonds of 18.3% of GDP, a level very close to that of deposits (18.8% of GDP). Italians heavily financed the needs of the state as well, with bonds representing 20% of GDP.
However, Italians display several differences. First of all, the selected assets owned by the population represent 135% of GDP cumulatively, above the level in Germany of approximately 117% of GDP.
Italians also attach the greatest importance to investment funds. They attracted resources of 34.1% of GDP from the population, the highest level among the ten analyzed states. Spaniards also stand out in this regard, with investments of 29.5% of GDP.
Despite having a share of only 13% of GDP, investments in funds in Hungary have a share of more than 20% of the total assets selected.
French and Germans, the biggest investors in stocks
France and Germany stand out as the countries with the most significant shareholdings, of 13.4% of GDP and 12.6% of GDP, respectively, in 2023, according to Eurostat data.
The French are also notable for their very low share of bond holdings, 1.5% of GDP, similar to Romania. This is the third lowest level among the analyzed states, after Bulgaria and Poland. In turn, Germany is noteworthy for its very high share of cash, 10.6% of GDP, the highest percentage among the analyzed states.
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