Global household wealth drops by $12 trillion
London, October 10, 2012
The aggregate global household wealth fell 5.2 per cent in current dollar terms to $223 trillion during the mid-2011 to mid-2012 period, according to a report.
The Global Wealth Report 2012, released by Credit Suisse Research Institute, said the fall was due to the economic uncertainties of the past year – particularly those affecting the Eurozone.
Furthermore, the relative stability of the US economy has led to an appreciation of the US dollar against most currencies, but the impact is especially apparent in Europe, raising the aggregate wealth loss to $10.9 trillion, by far the largest contribution to the total global loss of $12.3 trillion. Asia-Pacific was the other big regional loser, shedding $1.4 trillion.
Against the backdrop of the Eurozone crisis, Credit Suisse in its report also details the rise in household debt, which has risen in aggregate by 81 per cent from 2000-2012, and analyses household debt as a fraction of net worth, i.e., typically 20-30 per cent of wealth in advanced economies.
The study, however, predicts that wealth will rise by almost 50 per cent in the next five years from $ 223 trillion in 2012 to $330 trillion in 2017
It highlights the following forecasts:
• The number of millionaires worldwide will increase by about 18 million reaching 46 million in 2017
• China to add a total of $18 trillion to the stock of global wealth in the next five years and surpass Japan as the second wealthiest country in the world
• The US to remain on top of the wealth league with $89 trillion by 2017
• The Eurozone's total wealth in the next 5 years to only equal today’s level of wealth in the US, despite that the Eurozone counts 16 million more adults
Giles Keating, global head of research for private banking and asset management, Credit Suisse, said: “The third annual Credit Suisse Global Wealth Report analyses the overall patterns of wealth as one of the pillars of the economic system from which we can extrapolate where economic growth is coming from, assess the accumulation of capital, trends in consumption and asset prices, and understand the drivers of growth in specific industries such as healthcare and banking. This year’s report also includes comprehensive analyses of household debt and government debt, to highlight which countries have sustainable overall debt levels and which ones have the most problems.”
Credit Suisse Research Institute’s Michael O’Sullivan and Richard Kersley said: “There’s no question that the economic uncertainties of the past year – particularly those affecting the Eurozone – have cast a huge shadow over household wealth. Our research confirms that economic recession in many countries combined with widespread equity price reductions and subdued housing markets have produced the worst environment for wealth creation since the financial crisis.”
Top of the wealth pyramid
Credit Suisse estimates suggest that worldwide there are 84,500 UHNW individuals, defined as those with net assets exceeding $50 million. Of these, 29,300 are worth at least $ 100 million and 2,700 have assets above $500 million. North America dominates the regional ranking, with 40,000 UHNW residents (47 per cent), while Europe hosts 22,000 individuals (26 per cent), and 12,800 (15 per cent) reside in Asia-Pacific countries, excluding China and India.
In terms of single countries, the US leads by a huge margin with 37,950 UHNW individuals, equivalent to 45 per cent of the group. The recent fortunes created in China have propelled it into second place with 4,700 representatives (5.6% of the global total), followed by Germany (4,000), Japan (3,400), United Kingdom (3,200) and Switzerland (3,050). Numbers in other BRIC countries are also rising fast, with 1,950 members in Russia, 1,550 in India and 1,500 in Brazil, and strong showings are evident in Taiwan (1,200), Hong Kong (1,100) and Turkey (1,000).
Wealth of nations
Top 10 countries with the highest average wealth per adult in mid-2012 (USD)
The richest nations, with wealth per adult over $100,000, are found in North America, Western Europe, and among the rich Asia-Pacific and Middle East countries. They are headed by Switzerland, which in 2011 became the first country in which average wealth exceeded $500,000. Exchange rate changes have reduced its wealth per adult from $540,000 in 2011 to $470,000 in 2012; but this still remains considerably higher than the level in Australia ($354,986) and Norway ($325,989), which retain second and third places despite falls of about 10 per cent. Close behind are a group of nations with average wealth above $200,000, many of which have experienced double digit depreciation against the US dollar, such as France, Sweden, Belgium, Denmark and Italy. – TradeArabia News Service
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