Romanian retail investors are showing the highest level of trust in the Romanian economy than they did in the last two years, according to the latest quarterly eToro Retail Investor Beat survey.
Also, the confidence in their investment choices was the highest in the past 12 months, writes eToro analyst for Romania, Bogdan Maioreanu. .
In Q2, 39% of the Romanian retail investors said they are confident in the Romanian economy. Since 2023, the proportion of investors who say they are confident in the Romanian economy has never been higher than 38%. Still, a clear majority (61%) continue to not trust the local economy, which has been struggling with slow growth and high budget deficits in recent years. When the same question was asked about the global economy, 52% of the Romanian investors showed their distrust, a smaller percentage than in March (55%). Despite this situation, 77% of the Romanian investors are confident about their job security (the same percentage as in March) and 73% are confident about their income and living standards, an increase from the 68% in March.
At the global level, 57% of retail investors declared that they are not confident about their local economy. If we look at specific countries, 70% of the French, 64% of the Australian and Czechs, 62% of the Italians, 61% of the British, Germans and Romanians, 59% of the Spanish, 56% of Americans, 46% of the Polish, 29% of the Dutch and 28% of the Danish retail investors, expressed their distrust in their local economies. The Danish (72%), Dutch (71%) and Polish (54%) investors have shown the highest confidence levels in their economies.
When it comes to their portfolios, 83% of the polled Romanian investors have confidence in their investment choices. The global situation created some changes in their asset exposure. If at the end of last year, 58% of investors had exposure to Europe, this percentage increased to 68% at the end of March this year, but decreased to 66% this quarter. Meanwhile, the percentage of investors with exposure to the US region stayed relatively flat, with a small decrease from 37% at the end of 2024 to 35% in Q1 and an increase to 36% this quarter.
Half of Romanian retail investors have local stocks in their portfolios, 38% have foreign equities, 55% have a form of crypto assets, while almost three-quarters have cash, including savings accounts, the latest eToro Retail Investor Beat survey show.
As for the external risks for their portfolios, a possible recession of the Romanian economy is the top concern for the Romanian retail investors. About 24% of respondents consider this to be the main external risk for their investments, followed by inflation (23%) and the state of the global economy (22%). While the percentage of investors worrying about the global economy’s status decreased from 24% to 22% compared with last quarter, the one of investors worrying about a possible recession of the Romanian economy increased from 18% in Q1 to 24% this quarter. Despite all the political discussion concerning increases in taxes, the percentage of Romanian investors worried about this stayed constant at 7%. Meanwhile, the percentage of investors who see an international conflict as the main risk for their portfolio decreased from 16% in Q1 to 12% this quarter.
With plenty of unknowns ahead and while their number decreased, the Romanian retail investors still in their majority distrust the local economy. And this should give the government of Ilie Bolojan and politicians from the whole political board a lot to think about.
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