Romanians hold 5.7% of the financial wealth in the Eastern European region, according to the Boston Consulting Group Global Wealth Report 2024: The GenAI Era Unfolds. 

Romanian financial wealth, valued at USD 300 billion, represented 5.7% of the financial wealth in Eastern Europe in 2023, experiencing an annual growth rate of 15.5% from 2018 to 2023. The BCG report estimates that Romanian financial wealth will grow by 8.6% per year over the next five years, reaching USD 400 billion by 2028. 

As stated in the report, the growth rate is one percentage point faster than the forecasted average for Eastern Europe and three percentage points above the expected global average growth rate.

The proportion of long-term investments, consisting mainly of life insurance and retirement savings, accounts for 40% of the total financial wealth of the Romanian people, significantly above the Eastern European average (31%) and the global average (35%). Meanwhile, the share of investible wealth, including cash, deposits, investment funds, stocks, and bonds, is slowly but steadily decreasing, a trend opposite to what is observed globally. 

"Romanians hold a relatively low proportion of their wealth in cash and deposits (34%), compared to the Eastern European average (44%). We also observe a very high share of other investments, 20%, in unlisted shares and smaller asset classes, which is rare in other regions where the global average is just 2%, and the Eastern European average is 8%,” said Krisztian Horvath, Partner and Associate Director, Wealth Management, BCG.

Up to half of Romanians' financial wealth is held by individuals with assets under USD 250,000, a much higher proportion than the global average of 30%. On the other hand, the share of the very wealthy, with financial assets over USD 100 million, is also significantly higher than the global average, at 23%, compared to 14% globally.

"In the next five years, we expect strong growth in segments attractive to private banks, such as those with financial wealth between USD 250,000 and USD 20 million. The expected growth of this segment, from approximately 60,000 to 85,000, offers attractive acquisition opportunities for banks providing customized solutions dedicated to this segment," Krisztian Horvath further stated, cited by HotNews.

There was a significant recovery in 2023 regarding global net wealth, with an increase of 4.3% after a difficult year in 2022. Much of this growth was due to a recovery in the financial market, as financial wealth grew by nearly 7%, following a 4% decline in 2022. An estimated USD 92 trillion in financial wealth is expected to be created over the next five years. 

Financial wealth in North America and Western Europe saw a recovery in 2023. Supported by strong capital markets, North America was among the fastest-growing regions, accounting for over 50% of all new financial wealth created in 2023. The recovery was not as strong in Western Europe, where financial wealth grew by only 4.4%. 

Although financial wealth in the Asia-Pacific region grew by just 5.1% in 2023, mainly due to a slowdown in wealth creation in China, significant growth is anticipated by 2028. The region is expected to contribute nearly 30% of new financial wealth by 2028. 

Besides China, India is well-positioned to be a driver of wealth growth, generating approximately USD 590 billion in new financial wealth in 2023, the largest increase in history.

radu@romania-insider.com

(Photo source: Aaron Amat | Dreamstime.com)