Romania is expected to witness strong growth rates in terms of population assets and financial debts, but will continue to lag behind other neighbouring markets, according to a survey conducted by the UniCredit Group.
Domestically, the financial wealth of the population is predicted to rise at annual rates of 19% until 2009, compared with an average rate of 12% in Central and Eastern European countries. Financial debts will increase at an average annual rate of 34% against the 19% rate predicted by UniCredit economists for the entire CEE region.
However, the cumulated financial wealth of Romanian households is expected to account for 29% of the GDP within the next three years, while in Bulgaria, Turkey and Slovenia the indicator will stand at 50% and exceed 70% in the case of Poland.
Consecutively, population financial debts will climb to 21% of the GDP, compared with 23% in Poland and 29% in Hungary.
Rozalia Pal, senior economist with UniCredit Romania, believes that the Romanian population will have a bigger appetite for consumer loans during this period, with a growing desire to acquire white goods. Under the circumstances, the net wealth of the population (the difference between financial assets and contracted loans) is expected to go down further, from 11% of the GDP registered late last year to 8% in 2009. For CEE countries, the net wealth of the population is estimated to fall slightly, from 40% in 2006 to 39% by 2009. "Net population wealth will therefore be sensitive to shocks caused by income decreases or interest rate rises," warns Pal.
The low level of net population wealth in the GDP is not a problem in itself, but calls for increased caution on the part of banks and monetary authorities in terms of lending, believes Fabio Mucci, UniCredit Group economist for CEE.
Financial assets per capita stood at 1,080 euros in Romania at the end of last year, while liabilities amounted to 560 euros per capita, meaning that the net financial position per capita stood at 520 euros, explains Rozalia Pal.
According to the UniCredit survey, amid rising population incomes and the rapid evolution of financial markets, high-risk placements, such as those in assets or investment funds, are expected to increase fast in Russia, Romania and Bulgaria.
Placements in mutual funds are predicted to post an average annual increase of 61% in Romania by 2009, against 16% in the case of CEE countries. Insurance placements will also register a considerable growth rate of 31%, almost double the regional average.
UniCredit economists expect Romanians' financial wealth to total 38.9bn euros by 2009, from 23.3bn euros recorded last December. In parallel, indebtedness is expected to climb from 21.1bn euros registered at the end of 2006, to 28.5bn euros.
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