We've witnessed a robust 19% annual growth over the past four years, a trend we expect to continue. This optimism is rooted in the significant room for expansion, as total assets currently account for less than 2% of GDP, far below the European averages of 40-80% and even significantly below CEE-peer countries. While full convergence with European standards may take decades, the growth potential in the interim is substantial.
Bulgaria's economic outlook
Our analysis considers Bulgaria's economic outlook, projecting a nominal GDP (Gross domestic product) growth of around 6% annually until 2030. The strong correlation between asset growth and GDP expansion is expected to persist, albeit with some moderation, providing a solid foundation for the asset management sector's expansion.
Looking ahead to 2030, we project an annual growth rate of about 13.0% for the Bulgarian asset management market. This can be broken down into two components:
around 5.4% organic growth from asset performance, reflecting the current asset allocation in Bulgarian portfolios,
and a more substantial 7.6% growth driven by economic convergence and increased financialization of the Bulgarian economy.
Given these projections, our analysis suggests that the Bulgarian asset management market still has a long way to go and will likely not catch up to the European average in terms of total assets under management. We do, however, expect some convergence, which underscores the significant opportunities present for both domestic and international investors and asset managers. We would see some upside to our forecasts in case the historically very low savings ratio picks up strongly over the coming years. Finally, a successful euro entry could act as an additional boost.
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