#154 Global Wealth Report

Summary:

Wealth continued to grow at a moderate pace in 2018, partly reflecting continued rises in equity markets but due more to increases in non-financial assets. The United States continued its unbroken spell of wealth gains since the global financial crisis, adding another USD 6 trillion to the stock of global wealth. China and Europe also made significant contributions to the new record level of global wealth, which is equivalent to USD 63,100 per adult.

This blog is based on https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html

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The world was wealthier in the past than we believed a year ago. New official statistical data and other reliable sources have led us to revise our estimate of total global wealth in mid-2017 upward by nearly USD 23 trillion, or 8%. China is the main beneficiary of this newly recorded wealth, although Spanish wealth has also been subjected to a major upgrade. The revision mostly relates to non-financial assets owned by the middle class. This reduces our estimate of the share of financial assets in total global wealth by 1% and the shares of the top 1% and top 10% of wealth holders by about three percentage points. The main outcome of the new wealth valuations is confirmation of what many observers already suspected – that China is now clearly established in second place in the world wealth hierarchy.

Assigning individuals to their corresponding global wealth positions enables the regional pattern of wealth to be portrayed. China is building middle class wealth, US is concentrating wealth at the top of the pyramid.

While the bottom half of adults collectively owns less than 1% of total wealth, the richest decile

(top 10% of adults) owns 85% of global wealth, and the top percentile alone accounts for almost

half of all household wealth (47%). The shares of the top 1% and top 10% in world wealth fell

significantly between 2000 and 2008: the share of the top percentile, for instance, declined from

47% to 43%. However, the trend reversed after the financial crisis. The share of the top 10%

was little affected. But in 2016 the share of the top 1% rose back above the level we estimate

for 2000. The trend in the share of the top 1% partly reflects the trend in the share of financial

assets in the household portfolio, which fell during 2000–08 and then began to rise after the

global financial crisis, raising the wealth of many of the richest countries, and of many of the

richest people.

Findings:

The greatest concentration of wealth exists in Brazil, India and Russia for the top 1% holding between 45% to 65%.  Established economies, such as Japan,  France and the UK shares held by the top 1% are between 20% to 25% of total wealth.

The issue is not only in distribution of wealth by how accumulated wealth is applied for growth of the economy in the future. China appears to apply wealth to the middle class whereas Brazil, India and Russia deploy wealth to concentrate wealth to accumulate personal assets.