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GCC wealth totals $1,719 billion in 2014.

Wealth growth in the GCC outpaces global increase

DUBAI, October 29, 2014

Wealth growth in the GCC has outpaced global growth since 2000, a report said, highlighting that aggregate wealth per adult in the GCC grew by 236 per cent against 125 per cent for the world.

Wealth per adult in the GCC has grown by 110 per cent against 77 per cent for the world, added the fifth annual Global Wealth Report released by the Credit Suisse Research Institute.

Financial wealth has been a key driver of growth over the last 15 years, growing at double the pace of non-financial wealth.

In the GCC, total wealth stood at $1,719 billion in 2014, growing 4.75 per cent from 2013.  Total wealth in Saudi Arabia and UAE grew by 5 per cent, while Bahrain, Kuwait and Oman witnessed 4 per cent growth from the same period last year.

Average wealth per adult rose by 3 per cent both in Saudi Arabia and the UAE. In Kuwait, Oman and Qatar, average wealth per adult grew by 2 per cent in each market.

The report found that from mid-2013 to mid-2014 aggregate global household wealth increased by 8.3 per cent in current dollar terms to $ 263 trillion, despite an ongoing challenging economic environment.

Giles Keating, global head of Research for Private Banking & Wealth Management, Credit Suisse, said: “The fifth annual Credit Suisse Global Wealth Report shows a $20.1 trillion rise in wealth to $263 trillion. North America and Europe stand out this year, with percentage gains exceeding 10 per cent in both cases. Developing economies have lagged as a result of weaker asset prices and currency pressures.”

Credit Suisse Research Institute’s Markus Stierli said: “This year's report puts wealth inequality under the lens, and 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.”

Changes in global wealth from 2013-2014

Total global household wealth increased in current dollar terms to $263 trillion, or $56,000 per adult in the world, an all-time high for average net worth. This is underpinned by a strong recovery in asset prices.

At the country level, among the major economies, the UK, South Korea and Denmark recorded the largest percentage gains, while Ukraine, Argentina and Indonesia incurred the largest losses.

Global wealth trends since 2000

Aggregate household wealth has more than doubled since the start of the millennium from $117 trillion in 2000 to $ 263 trillion in mid-2014. Over the same period, personal wealth in India and China has risen by a factor of 3.1 and 4.6 respectively. Allowing for the rise in the adult population, global net worth per adult has increased by 77 per cent from 2000, an average growth rate of 4.3 per cent per annum. Despite recording a 15 per cent decline during the financial crisis, wealth per adult has increased each year since 2008 and is now 7 per cent above its pre-crisis peak.

The share of financial wealth was 55 per cent of gross wealth in 2000, and fell to 49 per cent by 2008. Following the recovery of asset prices, financial assets have trended upwards since then, and now account for 54 per cent of gross wealth. Household debt relative to net wealth peaked in 2008 and is now at 16.5 per cent, the lowest level since 2001. However, over the last 15 years household indebtedness in developing economies has been rapidly increasing.

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. Switzerland is the country with by far the highest wealth per adult, followed by Australia and Norway (see Table 2). Denmark and the UK have moved up two places and now rank 8th and 9th respectively in terms of wealth per adult. Singapore has lost three places, but is still among the top ten.

Top of the wealth pyramid

The new data on millionaire trends indicates that the number of millionaires has increased significantly since 2000, rising by 164 per cent over the period, to 34.8 million individuals today. The US has 41 per cent of global millionaires. From 2007 to 2009, the number of HNW individuals in Europe briefly overtook the US, only to fall behind since then. Japan's share also fell to below 10 per cent a year ago and is now down to 8 per cent.

Worldwide there are 128,000 UHNW individuals, those with net assets exceeding $ 50 million, against 41,000 in 2000, the report said.

Of these, 45,000 are worth at least $100 million (against 14,000 in 2000) and 4,300 have assets above $ 500 million (1,200 in 2000). The US dominates the regional ranking, with 63,000 UHNW residents (49 per cent), while Europe has 31,000 (24 per cent), and 26,000 (20 per cent) reside in Asia-Pacific, including China and India.

The outlook for wealth

Wealth is expected to rise by 40 per cent in the next five years in nominal terms, reaching $ 369 trillion by 2019. Average wealth is expected to rise by $ 18,000 per adult worldwide (31 per cent), from $ 56,000 to $ 74,000 in 2019.

The share of wealth of emerging markets will likely reach 21 per cent by 2019, which amounts to $ 76.4 trillion. The annual nominal rate of increase is projected to be 9.3 per cent for emerging markets against 6.4 per cent for developed markets. – TradeArabia News Service

Tags: Credit Suisse | GCC | millionaires |

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