Despite an ongoing challenging economic environment, global wealth per adult has reached an all-time high of US$56,000 per adult, following an increase of US$3,450 since mid-2013. But inequality, especially in emerging markets, has also risen.
The fifth annual Global Wealth Report by Credit Suisse Research found that global wealth now stands 20 percent above its pre-financial crisis peak and 39 percent above its 2008 low. Aggregate household wealth increased 8.3 percent to $263 trillion.
Financial assets which make up 54 percent of gross wealth have recovered since the financial crisis and have driven much of the wealth growth since 2008 when their gross wealth share had dropped to less than half.
North America and Europe were the best performers, with gains exceeding 10 percent in the past 12 months, said Giles Keating, global head of research for Private Banking and Wealth Management at Credit Suisse. “Developing economies have lagged as a result of weaker asset prices and currency pressures,” he added.
Despite these difficulties, emerging markets are expected to increase their share of global wealth to 21 percent by 2019. The report forecasts that China alone will represent nearly 10 percent of global wealth five years from now, compared to just over 8 percent today.
The number of millionaires worldwide is set to grow by 53 percent in the next five years to 53.2 million.
While the number of millionaires in emerging economies is still far below the levels in the U.S. (20 million) or Europe (19 million), Credit Suisse forecasts a substantial increase over the next few years. China could see its number nearly double by 2019, to 2.3 million adults, whereas Brazil and Mexico will underpin the number of millionaires in Latin America, which could reach 921,000 in five years.
Growing inequality in emerging markets
However, Credit Suisse Research Institute’s Markus Stierli said this year’s report also highlights growing wealth inequality. “The findings show that inequality has tended to rise since 2008, particularly in developing economies. The financial crisis has acted as a breakpoint in inequality, as most countries were showing a flat or declining trend before 2007,” he said.
Since 2000, wealth inequality has increased in Latin America and Africa, and to a greater extent in India and China, but has fallen slightly in Europe and North America.
Global median wealth per adult, which is more representative of the average individual, increased 142 percent from 2000 to 2007, outpacing average wealth, which grew by just 65 percent. But since 2007 median wealth per adult failed to return to its pre-crisis high of $4,215 and now stands 14 percent lower at $3,641.
Nonetheless, the report finds that about 1 billion adults belong to the global middle class with wealth in the $10,000 to $100,000 range. China’s share of the middle class has doubled since 2000 and now covers one-third of the global middle class, ten times the share of India.
For the first time this year, more than 400 million adults have wealth above $100,000, compared with 217 million at the start of the century.
Household debt relative to net wealth stands at 16.5 percent, the lowest level since 2001 after peaking in 2008, but household indebtedness in developing economies is growing fast.
The U.S. remains the leader in terms of aggregate wealth and is expected to grow its total net worth to more than $114 trillion by 2019. Switzerland is the country with by far the highest wealth per adult, with an average of $581,000, followed by Australia and Norway.