- Growth subsided after 2007 and rising inequality has squeezed its share of wealth in every region
- Global wealth fell by USD 13 trillion from mid-2014 to mid-2015, due to dollar appreciation
- Global wealth could reach USD 345 trillion by mid-2020, 38% above its mid-2015 level
- The number of dollar millionaires worldwide could increase by 46% in the next five years
- The USA again led the world, meanwhile, China has the largest middle class with 109 million members, and Switzerland again ranked highest in average wealth
The size and wealth of the middle class globally grew quickly before the financial crisis, but growth subsided after 2007 and rising inequality has squeezed its share of wealth in every region, according to the sixth annual Global Wealth Report, just released by The Credit Suisse Research Institute, which focuses on how the middle class has developed since the turn of the century.
The report shows that global wealth fell by USD 13 trillion from mid-2014 to mid-2015, due to dollar appreciation. If measured at constant exchange rates, global wealth would have risen by USD 13 trillion since last year. According to the company´s estimates global wealth could reach USD 345 trillion by mid-2020, 38% above its mid-2015 level, and the number of dollar millionaires worldwide could increase by 46% in the next five years, reaching 49.3 million by mid-2020.
The USA again led the world with a substantial rise in household wealth of USD 4.6 trillion. Meanwhile, China -also posted a large annual rise of USD 1.5 trillion- has the largest middle class with 109 million members, surpassing the USA with 92 million. And Switzerland again ranked highest in average wealth, but fell USD 24,800 to USD 567,100 per adult.
Wealth per adult fell by 6.2%to USD 52,400 and is now back below the level of 2013, -shows the report-, and a person needs just USD 3,210 (after debts) to be in the wealthiest half of the world.
In its analysis, the company has taken a new approach to defining the middle class category, using a wealth-based definition – versus an income-based one – that allows for adjustments over time to reflect inflation, and also varies across countries depending on local purchasing power.
Michael O’Sullivan, Chief Investment Officer for the UK & EEMEA, Private Banking and Wealth Management at Credit Suisse said, “We are clearly in a growth industry, with wealth set to continue its upward trajectory. By our estimates, wealth could grow at an annual rate of 6.6%, reaching USD 345 trillion in 2020. Furthermore, the number of dollar millionaires could exceed 49.3 million adults in 2020, a rise of more than 46.2%, with China likely to see the largest percentage increase, and Africa as the next performing region. Overall, emerging markets account for 6.5% of millionaires and will see their share rise to 7.4% by the end of the decade. High-income economies will still account for the bulk of new millionaires, with 14.0 million adults entering this category. Millionaire net wealth is likely to rise by 8.4% annually, as more people enter this segment. Emerging markets will likely account for 9.1% of millionaire wealth in 2020, 1% above current levels.”
Credit Suisse Research Institute’s Markus Stierli said: “From 2008 onwards, wealth growth has not allowed middle-class numbers to keep pace with population growth in the developing world. Furthermore, the distribution of wealth gains has shifted in favor of those at higher wealth levels. These two factors have combined to produce a decline in the share of middle-class wealth.”
To view the full report you may use this link