Romanian retail investors are looking toward a profitable 2023 but their confidence in the local economy remains low, reveals the latest eToro Retail Investor Beat survey. While the politicians extensively discuss the budgetary deficit and Romania’s increasing sovereign debt, investors are more concerned about inflation and geopolitics, writes eToro analyst Bogdan Maioreanu.
The Romanian investors’ confidence in the local economy improved slightly in 2023 but it is still low. While still 62% of the surveyed investors are not confident in how the Romanian economy is progressing this year, in March 2022 this percentage was 69%. When asked about the property market, a majority of investors (52%) mentioned that they are not confident about it. This sentiment is also showing a slight improvement from 57% a year ago.
Despite the negative sentiment about the local economy, the vast majority of investors are confident about their jobs (78%) and their income and living standards (76%). This is natural taking into consideration that the Romanian labor market is resilient, latest data showing that seasonally adjusted unemployment edged down to 5.5 percent in February 2023 from 5.6 percent in the prior month, and pointing to its lowest level since September last year.
When asked about risks for 2023, Romanian investors indicated they are most worried by rising inflation, international conflict and a potential recession of the global economy. A recession in the Romanian economy comes only fourth in the top of investors’ worries but very close to the first three. And despite the fiery discussion about the steep increase of Romania’s sovereign debt, this topic worries only 5% of the investors while 10% are worried about a potential increase in taxes.
Overall, the poll reveals a very positive attitude in the investors’ portfolio return expectations for 2023, with 90% declaring that it will be a profitable year, while only 6% expecting losses. Women and men equally are seeing this to be a profitable year. While the poll results are close in all the geographic regions of Romania, there are still some slight differences. Most pessimists about 2023 results are coming from the Northwest while the most optimistic investors are in the Southeast of Romania. .
