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Global wealth rises despite trade tensions

Christian Fernsby |
Credit Suisse Research Institute publishes its tenth edition of the Global Wealth Report, the most comprehensive and up-to-date source of information on global household wealth.

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Topics: WEALTH    TRADE   

Global wealth grew during the past year up 2.6% to USD 360tn and wealth per adult reached a new record high of USD 70,850, 1.2% above the level of mid-2018. US, China and Europe contributed the most towards global wealth growth with USD 3.8tn, USD 1.9tn and USD 1.1tn respectively.

Viewed in terms of wealth per adult, Switzerland tops the winners (up USD 17,790) followed the United States (USD 11,980), Japan (USD 9,180) and the Netherlands (USD 9,160).

The main loser was Australia (down USD 28,670) largely down to exchange rate effects, with other significant losses in Norway (down USD 7,520), Turkey (down USD 5,230) and Belgium (down USD 4,330).

Estimates for mid-2019 show 46.8 million millionaires worldwide, up 1.1million on 2018. The United States added more than half of this number – 675,000 new millionaires – to its sizeable stock.

The decline in average wealth in Australia resulted in 124,000 fewer millionaires, but losses were relatively modest elsewhere, e.g. 27,000 in the United Kingdom and 24,000 in Turkey.

Among the UHNW group in mid-2019, the report estimates that 55,920 adults are worth at least USD 100 million, and 4,830 have net assets above USD 500 million. North America dominates the regional breakdown, with 84,050 members (50%), while Europe has 33,550 (20%), and 22,660 (14%) live in Asia-Pacific countries, excluding China and India.

This year, for the first time, China recorded more members of the global top 10% (100 million) than the United States (99 million).

Wealth inequality declined within most of the countries during the early years of the century. Today, the share of the bottom 90% accounts for 18% of global wealth, compared to 11% in the year 2000. While it is too early to say wealth inequality is now in a downward phase, the prevailing evidence suggests that 2016 may have been the peak for the near future.

This year the report also assesses the performance of countries in real rather than nominal values taking into consideration the effect of inflation.

Emerging markets including China have become increasingly important to the world economy accounting for two thirds of real wealth gain since 2008, or double the contribution of North America.

China performs extremely well under real USD, current USD and Local Currency Unit

LCU) measures. Since 2008, average real USD wealth growth in Europe has been negative, in part due to retrenchment of the euro.

High-income Asia-Pacific countries have only a small role in this changing scenario and the rest of the world (including most of Africa and Latin America) simply offset the negative impact of Europe.

Global wealth is projected to rise 27% over the next five years, reaching USD 459 trillion 2024. Low-and middle-income countries are responsible for 38% of the growth, although they account for just 31% of current wealth.

Growth middle-income countries will be the primary driver of global trends. The number of millionaires will also grow markedly over the next five years to reach almost 63 million, while the number of UHNWIs will reach 234,000.

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