Romania’s private pensions up some real 10% y/y, still below the pre-war level

With an average advance of 18% over the 12-month period to end-September, the seven Romanian private pension funds (Pillar II) surpassed by nearly 10pp the consumer price inflation over the same time span, according to Ziarul Financiar.

The performance was helped by the robust growth of the Bucharest Exchange and stable interest rates (with a positive impact on the market value of the fund’s fixed-income portfolios).

However, in the previous 12-month period, the pension fund’s performance was negative (between -5.8% y/y and -10.5% y/y), which came on top of 13.0% y/y CPI inflation resulting in negative yields in the range of -16.6% y/y to -20.8% y/y.

Overall, the private pension funds still have to rise in order to return to the levels prevailing before the war in Ukraine.Otherwise, the significant contributions subsequent to nominal wages keeping up with inflation will allow fund managers to keep reporting record value of their portfolios.

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