The pandemic that’s led to more than 1 million deaths globally has also led to a decline in individual wealth, yet household wealth largely held up and even increased in China and India.
That’s one of the main findings in Credit Suisse Group AG’s 2020 Global Wealth Report released Thursday. Thanks to government and central-bank actions to mitigate the Covid-19 fallout, global wealth rebounded from an initial slump in the first quarter of the year, adding $1 trillion by June after ending 2019 at $399.2 trillion.
“Given the damage inflicted by Covid-19 on the global economy, it seems remarkable that household wealth has emerged relatively unscathed,” said economist Anthony Shorrocks, one of the report’s authors, adding as a caveat that the findings are based on provisional household balance sheets for the second quarter issued by few countries.
Global wealth creation is expected to rebound next year as the economy recovers. The “main outlier” is North America, the report says, where the economy is hobbled by the “continued weakness due to the high prevalence of Covid-19” in the U.S. The region’s wealth per adult is projected to drop 5% this year, and remain near that level in 2021.
Only China and India saw gains in household wealth in the first half of the year, growing by 4.4% and 1.6%, respectively. Latin America suffered the most, with a 13% plunge, as currency devaluations aggravated losses in gross domestic product.
Wealth per adult slipped to an average $76,984 from $77,309 at the start of the year, the report found. Switzerland, the Netherlands, Taipei and Hong Kong saw gains, while Norway and the U.K. posted the biggest declines.
The number of millionaires remained stable after soaring to 51.9 million last year, while the club of the ultra-high net worth individuals with more than $50 million in net assets lost only 120 members to 175,570. In the U.S., which has the most people in the top 1% wealth group and 39% of the world’s millionaires, the inequality gap has narrowed, according to the report.
The findings come as wealth gains, especially in the U.S. tech world, have been increasingly scrutinized as millions lost their jobs due to the coronavirus hit. Amazon.com Inc.’s Jeff Bezos -- the world’s richest person -- has amassed more than $73 billion this year, taking his fortune to $188 billion, according to the Bloomberg billionaires Index. Facebook Inc.’s Mark Zuckerberg has gained $27 billion to more than $105 billion, while the rise of Zoom Video Communications Inc. has pushed up Chairman Eric Yuan’s net worth by $22 billion.
Overall, the world’s 500 richest people have added $970 billion to their combined wealth this year, the Bloomberg index shows.
The top 1% of the world, with more than $1 million each, hold 43% of global wealth, the report concludes. Meanwhile, about 2.8 billion adults have less than $10,000, collectively owning just 1.4% of global wealth.
Female workers, millennials and minorities were hit the most by the pandemic, mainly because of their high representation in businesses such as restaurants, hotels and retail that have been badly affected. Millennials, which also suffered the repercussions from the financial crisis, and the next post-Covid generation will have to deal with reduced economic activity and globalization, as well as discouraged travel, Credit Suisse said.
“There is the promise of many more surprises to come,” said Nannette Hechler-Fayd’herbe, Credit Suisse’s chief investment officer for international wealth management and global head of the economics and research unit. “Among the major economies, China is likely to be the clear winner.”
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30 Comments on this Story
Fabulous Fab41 days ago
India has gone from zero production to the second highest manufacturer of PPE suites in the world. India really stepped up in the crisis. Vaccine production, PPE production, defence profuction due to the stand-off with China, banning cheap Chinese goods among other things. India will rebound stronger after the pandemic subsides.
Pradeep Kumar Mittal42 days ago
Increase in wealth may be due to less expenditure during the last six-year. Saved money may be got invested well through banks. Banking is our international pride to manage our money. The job sector is calling 50% of the population on the job in the private sector but the jobs in the government sector are also showing our savings projections to meet successfully. Business in need is a business indeed. So it is our pride possession to us saving oriented and new ways of doing business are waiting to come under the way of the common man. Pandemic is calling fresh establishments and new ease of doing business. An think differently and technically because the technology required less movement.
Giriraj Khandelwal42 days ago
false repesentation of the truth, ask the persons who suffered from Covid-19 physically...how much money they spent for diagnosis, treatment etc as also crores of people lost their jobs during lockdown and subsequently.....even people at lower level of starta and small and middle level shopkeepers, hawkers are still not able to earn livlihood to substantiate daily needs of their families