Global household wealth to rebound next year. Indian and China witnessed an increase in household wealth amid the COVID pandemic.
Increase in Household Wealth in China and India
Credit Suisse Group AG’s 2020 Global Wealth Report revealed that global wealth has rebounded adding $1 trillion by June. Economist Anthony Shorrocks, who is also one of the authors of the report, stated that household wealth has emerged unharmed, given the catastrophic effects of the pandemic. However, he warned that the results are based on provisional household balance sheets of the second quarter for this year issued by a few countries.
US Household Wealth Declines
The report further highlighted that the economy of North America had suffered severely. Noting the continued weakness due to prevailing COVID-19 in the U.S. region, it projects its wealth per adult to fall by 5% and remain around the same level in 2021. That apart, the figures show that Latin America has suffered the most. Norway and the U.K. have also witnessed significant declines in household wealth.
While individual wealth in the US region has decreased, China and India are the only countries that registered an increase in household wealth. Both countries grew by 4.4% and 1.6% respectively. Apart from these, Switzerland, the Netherlands, Taipei, and Hong Kong also saw gains.
Effect on the Wealthier
The report revealed that around 2.8 billion adults have less than $10,000 and account for 43% of global wealth. Also, the pool of ultra-high net worth individuals with income more than USD 50 million worth assets came down to 175,570, losing only 120 members. Besides, the inequality gap in the US has narrowed. Further, Amazon.com Inc.’s Jeff Bezos has added $73 billion this year, whereas Facebook Inc.’s Mark Zuckerberg has gained $27 billion. It is interesting to note that Zoom Video Communications Inc. Chairman, Eric Yuan’s net worth has increased by USD 22 billion. The Bloomberg Index confirms that the world’s 500 wealthiest people have amassed $970 billion this year. Overall, the number of millionaires remained stable after soaring to 51.9 million last year.
Female Workers, Millennials, and Minorities Suffered Relatively Higher
The agency further reported that the post COVID generation would have to deal with the financial repercussions of the COVID, which involves less economic activities and globalization. Also, the panic has hard hit the female workers, millennials, and minorities as their representation in the hospitality industry are relatively more than in any other sector. Nannette Hechler-Fayd’herbe, Credit Suisse’s chief said that China is the clear winner among the major economies.
In all, the report suggested despite the prospects for revival, there is still uncertainty in the economic environment.