Only 200,000 Romanians have accounts at the Bucharest Stock Exchange (or BVB), which is almost 1% of the country’s population. This is problematic, since investments can protect capital from devaluation, according to specialists at the credit and investment comparison platform MrFinance.
Romania is expected to see a 9% inflation rate by the end of the year due to increased taxation and rising prices. Even in non-crisis times, money loses value over time due to inflation, experts stress.
“For decades, in Romania, the dominant habit was to immediately consume available income or, at most, to save in bank deposits. This mentality has slowly begun to change, especially among new generations, who are becoming aware of the importance of financial planning and investments,” explained Ion Soltinschi, consultant and financial planner at MrFinance.ro.
According to the specialist, the Bucharest Stock Exchange has immense potential compared to other emerging markets. This is due to growing capitalization, attractive dividend yields, and the integration into global indices, such as the FTSE Russell.
Although development continues, the local market remains underdeveloped compared to GDP, which means there is significant room for growth in the coming years.
“Romania is facing significant economic and demographic challenges. The public pension system will come under increasing pressure due to the unbalanced ratio between the number of contributors and the number of retirees. In this context, private investments become the only realistic way to ensure a peaceful and prosperous old age,” said Ion Soltinschi.
According to him, a Romanian who starts investing from the age of 25–30 has the chance, through constant contributions and average returns of 8–10% per year, to accumulate significant capital for retirement. Well-balanced investments also ensure an increased level of financial security.
To achieve this goal, Ion Soltinschi recommends putting time in financial education before investing, starting with small amounts, using regulated platforms, and being patient.
(Photo source: Leonid Sorokin | Dreamstime.com)
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