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Romanians lack confidence in national economy, but are confident about their investment portfolios

July 22, 2024

92% of Romanian investors are expecting a positive return on their investments this year 63% of Romanian investors do not believe in a positive evolution of the Romanian economy Inflation continues to be perceived as the main investment risk, while investors are increasingly concerned about the prospect of an international conflict   In Romania, we have seen a sharp deceleration in inflation in the past couple of months, with annual inflation dropping to 5.1% in May after an increase at the beginning of the year induced by Governments decisions to hike taxes. However, for Romanian individual investors inflation remains the top concern, according to the latest eToro Retail Investor Beat survey. About 30% of respondents consider inflation as the main external risk for their investments followed by a potential recession of the global economy (19%) and an international conflict (18%). While compared with the previous quarter the concern about inflation decreased slightly from 31% to 30% worries about a global conflict increased from 15% to 18%.   At the global level, the poll shows that inflation is still the top concern (22%), followed by an international conflict (20%) and the possibility of a recession for the global economy (18%). In fact, the possibility of an international conflict made a steady rise in the past two quarters from 14% to the current 20%. We have seen this for the Romanian investors as well, with worries about war rising from 11% at the end of 2023 to 18% now. The most concerned about a major conflict are the Dutch (29%) followed by Danish (28%), French (27%), Polish (25%) and Italian investors (23%). The least concerned are the US investors (6%).   A possible recession of the Romanian economy raises concerns for 15% of the Romanian investors, while only 8% worry about new tax hikes, despite the current need of the Romanian government to find new income sources to decrease the budgetary deficit.   A fear that the global and local economies are not working well is apparent from the low level of confidence of the Romanian investors in the macroeconomic situation. Almost two-thirds of the surveyed investors (63%) do not believe in a positive evolution of the Romanian economy. However this is the lowest number since Q1 2023. Despite this, 71% of respondents are confident in their income and living standards, which shows great trust in their own skills and personal situation. The eToro Retail Investor Beat survey is also showing that over three quarters (77%) of Romanian retail investors are having high confidence in their job security. These are the highest figures in the past 18 months.   When it comes to their portfolios, 82% of the Romanian investors are having a high level of confidence in their investment choices. This figure has increased by 4% since last quarter. Still, over 92% of Romanian investors are expecting a positive return on their investments this year with over 57% expecting profits in excess of 10%. And so far the markets showed them right with the S&P 500 index up over 14% and Nasdaq up 18%, the German DAX up 9% and the Romanian index BET up over 18% since the beginning of the year. ( Macro commentary by eToro analyst for Romania, Bogdan Maioreanu)   About the poll The latest Retail Investor Beat was based on a survey of 10,000 retail investors across 12 countries and 3 continents. The following countries had 1,000 respondents: UK, US, Germany, France, Australia, Italy and Spain. The following countries had 600 respondents: Netherlands, Denmark, Poland, Romania, and the Czech Republic. The survey was conducted from 15 May - 5 June 2024 and carried out by research company Opinium. Retail investors were defined as self-directed or advised and had to hold at least one investment product including shares, bonds, funds, investment ISAs or equivalent. They did not need to be eToro users.   About eToro eToro is a trading and investment platform that empowers people to grow their knowledge and wealth as part of a global community of investors. eToro was founded in 2007 with the vision of opening up the global markets so that everyone can trade and invest in a simple and transparent way. Today, eToro is a global community of more than 35 million registered users who share their investment strategies; and anyone can follow the approaches of those who have been the most successful. Due to the simplicity of the platform users can easily buy, hold and sell assets, monitor their portfolio in real time, and transact whenever they want.  

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