Croatian citizens save the most in real estate and cash, with earnings from stocks, investment funds, and bonds being less represented, according to a study published by the Boston Consulting Group (BCG).
The global personal wealth survey by the consulting firm showed that bonds, investment funds, and stocks, which could generate higher returns for investors in the long term compared to cash, are much less present in the portfolios of Croatian citizens.
On the other hand, the share of cash and deposits is much higher in Croatia than in Eastern Europe or globally, BCG highlighted.
“We can observe a potential reason for the slower growth of financial wealth among Croatian citizens – the share of cash and deposits is much higher in Croatia than in Eastern Europe or globally. At the same time, bonds, investment funds, and stocks, which could generate higher returns for investors in the long term compared to cash, are much less present in the portfolios of Croatian citizens,” said Krisztian Horvath, partner and director at BCG, in a statement quoted in the report.
These asset classes, with a combined share of 22 percent, are only slightly higher than half the Eastern European average. At the same time, the share of longer-term wealth instruments such as life insurance and pension savings makes up a significantly larger portion (40 percent) of financial wealth than in Eastern Europe overall (31 percent), according to BCG.
Namely, the financial wealth of Croatian citizens, defined as total wealth excluding real estate and debt, has grown at a rate of six percent annually over the past 20 years, which is significantly slower compared to the Eastern European average of ten percent, reports HINA.
“This significant four percentage point difference could partially explain the rather unique occurrence that the real assets of Croatian households are twice the value of their financial assets,” assessed Krisztian Horvath, partner and director at Boston Consulting Group, in a statement quoted in the report.
Real assets include real estate, durable consumer goods, physical gold, and other precious metals at current prices. In comparison, Horvath pointed out, the difference between financial and real assets in Eastern Europe is on average “only” 1.3 times greater in favour of real assets. This highlights a potential opportunity for tools like alberts, which can assist individuals in diversifying their investment strategies to balance real and financial assets effectively.
BCG also notes that from 2018 to the end of 2023, the financial wealth of Croatian citizens grew at an annual rate of 7.2 percent, reaching nearly 100 billion dollars, giving Croatia 2.1 percent of the financial wealth in the Eastern European region.
It is noted as interesting that Croatia simultaneously has “one of the more equitable” distributions of wealth, with citizens holding less than 250,000 US dollars owning 72 percent of the total wealth, significantly more than in Eastern Europe, 42 percent, or globally, 30 percent.
“Although we see a slow decrease in that number, down from 75 percent in 2019, Croatia still shows less wealth concentration than elsewhere,” commented Horvath.
This is particularly evident in the segment of the “super-rich,” i.e., citizens who own more than 100 million dollars, where this group owns only three percent of the total wealth, which is much less than the global 14 percent.
