The wealth of Romanian households rose to more than RON 2,000 billion (around EUR 425 billion) at the end of last year, a value slightly lower than the pre-crisis level, mainly due to higher real estate prices, according to a financial stability report released by the central bank, which warns about rising inequalities.
“The net wealth of the population increased in 2018, approaching the maximum value registered in 2008, after an increase of 9.7 percent in the last quarter of 2018 compared to the same period of the previous year. The evolution was determined in a high proportion by the increase of the real estate assets, which is corroborated, to a lesser extent, by that of the financial assets,” the report says.
Although Romania has the highest real estate ownership in the European Union, there is a high degree of wealth inequality, with the richest 10 percent of households accounting for about 60 percent of wealth., the central bank points out.
“There is a possibility that the level of inequality may increase, given that only a small part of the population will benefit from the increase in the value of non-financial assets,” the report indicates.
Romanians prefer safe investments in deposits and cash (about 40 percent of the total assets in December 2018).
A number of inequalities persist in the banking economy: about 78 percent of depositors hold deposits of up to RON 5,000, while 71 percent of the deposits are held by only about 5 percent of depositors,” the central bank says.
In June 2018, the total wealth of Romanian households, including real estate assets and financial assets, was RON 1,929 billion (EUR 415 billion).
This report is similar to a recent report released by Credit Suisse – the “Global Wealth 2018” report.
Credit Suisse analysts say Romanians adults have a total wealth of USD 659 billion (or USD 42,282 per adult) in 2018 based on national household balance sheets (HBS) or household surveys.
But by “regression estimates” using likely correlated variables, Romania’s total wealth is considered much smaller – of USD 317 billion (or USD 20,321 per adult) – a value similar to Romanian central bank’s calculations.
But there are huge differences between Romanians regarding wealth, according to the Credit Suisee study. 62 percent of Romanian adults own less than USD 10,000 in assets (financial or non-financial), while 35.4 percent own between USD 10,000 and USD 100,000, and 2.5 percent between USD 100,000 and USD 1 million.
Only 0.1 percent of Romanians are wealthy enough to own assets of more than USD 1 million, according to Credit Suisse.