SNAPSHOT OF RISING GLOBAL WEALTH
The 2018 Credit Suisse Global Wealth Report reveals a steady growth in global household wealth, with Singapore among the top for Asia’s wealthiest individuals.
The Credit Suisse Global Wealth Report is an annual report that attempts to paint a comprehensive picture of the world’s household wealth, and the factors contributing to it. Household wealth is essentially the value of financial and real assets owned by a household, minus any debts.
The report’s 2018 edition marked the increase in household wealth at moderate pace, with a growth rate increase of 4.6% over the last 12 months till mid-2018. While this rate is lower compared to 2017, it is important to note that it is still higher than the average over the last decade – in fact, with the population growth rate being lower than that of the wealth growth rate, global mean wealth per adult reached a record high of US$63,100.
Increasing Global Wealth
The report found that while financial assets constituted 41% of the increase in wealth, the biggest stimulus to overall growth was the increase of non-financial assets in most regions. The last 12 months have seen non-financial assets account for more than 75% of the rise in China and Europe, and all of the rise in India. Country wise, the US and China recorded the highest wealth gains, followed by Germany, France, the UK, Italy and Japan. China now ranks second in the world wealth hierarchy, overtaking Japan with respect to the number of ultra-high net worth (UHNW) individuals in 2009, total wealth in 2011, and number of millionaires in 2014. The biggest losses in wealth were recorded in Brazil, Turkey and Argentina.
Geographically, North America and Europe account for 60% of total household wealth – even though they account for 17% of the world’s population. China and the Asia-Pacific region have a population share about 30% higher than the wealth share, while the population share is more than thrice the wealth share in Latin America, nine times the wealth share in India, and 15 times the wealth share in Africa.
In terms of measuring wealth per adult, the US has the largest increase, followed by Libya, France, the United Kingdom, Ireland, Singapore, and a number of smaller countries. The largest decrease in wealth per adult was recorded by Switzerland followed by Sweden, New Zealand and Israel.
The number of millionaires increased in 2018 by 2.3 million, bringing the total to 42.2 million millionaires worldwide. The US alone contributed around 40% of the global increase, just a fraction below the combined total of new millionaires in France, Germany, the United Kingdom and Italy (around 200,000 each). China accounted for 186,000 new millionaires and 94,000 in Japan. The number of millionaires fell in a handful of countries, such as Turkey, Sweden, Australia and Brazil, primarily due to currency depreciation.
To be counted among the world’s wealthiest half of world citizens in 2018, an individual would require net assets worth US$4,210. Assets worth US$93,170 would land them among the top 10%, while US$871,320 would belong to the top 1% of global wealth holders.
Prosperity In Singapore
In Singapore, the number of millionaires grew by 11.2% from last year, bringing the headcount to 183,737. Wealth per adult has been growing since the new millennium to the current average of US$283,120. This puts Singapore at 9th place in the world in terms of household wealth per adult, the highest in Asia excluding China.
Similar to how assets are distributed in Switzerland, 55% of Singaporean household wealth is made up of financial assets. The average debt is 16% of the total assets, which is moderate for a high wealth country like Singapore. Statistics show that wealth inequality is not extreme in the Lion City – compared to 64% globally, just 14% of its people have wealth below US$10,000. However, the percentage of individuals with wealth above US$100,000 is five times more than the world’s average. Some 0.5% of these individuals are part of the top 1% of global wealth holders – no mean feat, considering that Singapore accounts for just 0.1% of the world’s adult population.
This article was first printed in MillionaireAsia Issue 50 - Dec 2018