While the sector has seen strong growth in recent years, 2023 marked a setback with asset declines, likely driven by negative net inflows.
However, Romania’s future remains bright, with total assets currently less than 2% of GDP (Gross domestic product) — well below the European average of 40-80%, and even trailing its CEE (Central Eastern Europe) peers.
Though full convergence with European standards may take decades, the near-term growth potential is significant.
Outlook until 2030
Our analysis projects nominal GDP growth of around 5.5% annually until 2030, which, in line with historical trends, should support asset management growth. The correlation between asset growth and GDP isn’t however as high as in other countries, leading us to believe that while this is still likely to be a positive influence on asset growth, it represents a smaller piece as elsewhere.
Looking ahead to 2030, we forecast annual growth of approximately 12.4% for Romania's asset management market. This breaks down into:
7.2% from organic growth due to asset performance, this component is significantly higher than with many CEE-peers, driven by a higher equity allocation in Romanian portfolios and relatively higher yields on fixed income assets in the country.
The remaining 5.2% comes from economic convergence and increased financialization of the Romanian economy.
While Romania may not reach the European average in terms of total assets under management in the near term, some convergence is expected, creating significant opportunities for both domestic and international investors.
A potentially positive upside trigger could also be the continued strong performance of Romanian equities, potential IPOs on the local markets and the increased stability brought about by the Romanian central bank continuing to achieve low levels of volatility in the exchange rate between the EUR and the RON. This stability would of course solidify with the adoption of the euro, which might be possibly by the end of this decade. A structural increase of the historically low savings rate in combination with solid further macroeconomic convergence might add to upside potential for our forecasts.
This document has been produced by Raiffeisen Bank International AG, Am Stadtpark 9, A-1030 Vienna/Austria
Supervisory Authorities: Austrian Financial Market Authority (FMA), Austrian National Bank, European Central Bank within the Single Supervisory Mechanism (SSM).
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This document constitutes neither investment advice, an offer or a recommendation nor an invitation to execute a transaction. Past performance is no reliable indicator of future results. The information presented does not constitute binding tax, financial or legal advice.
This document is based on the knowledge the persons preparing the document have obtained up to the date of creation. Errors and misprints excepted.
As of October 2024