During the 12 months to mid-2018, aggregate global wealth rose by $14 trillion to $317 trillion, representing a growth rate of 4.6%. This growth rate was lower than that for calendar year 2017, but higher than the average growth rate in post-2008, and a considerable improvement on the decline during 2014–15. It was also sufficient to outpace population growth, so that wealth per adult grew by 3.2%, raising global mean wealth to $63,100 per adult, a record high.
Financial assets suffered
Financial assets suffered most during the financial crisis and recovered better in the early post-crisis years. These continue to make a substantial contribution to growth of household wealth, accounting for 41% of the increase in gross wealth worldwide, and more than two-thirds of the rise in North America. However, non-financial assets have grown faster in recent years.
Over the past 12 months, these have provided the main impetus to overall growth in all regions except North America, accounting for more than 75% of the rise in China and Europe, and all of the rise in India. Household debt rose even faster at an overall rate of 7.1%. According to our estimates, debt increased in all regions except Africa and achieved double-digit growth in China and India.
North America added $6.5 trillion to its stock of household wealth in the last year, almost all in the United States, which accounted for $6.3 trillion. Europe contributed an additional $4.4 trillion, China $2.3 trillion, and Asia-Pacific (excluding China and India) almost $1 trillion. But Africa, India and Latin America together saw a net loss, partly due to the economic troubles in Argentina and Brazil. In percentage terms, the 6.5% loss in Latin America exceeded the percentage gains in North America, Europe or China.
India story
India’s wealth has trended upward strongly since the turn of the century, although there was a setback in 2008 due to the global financial crisis and there have been bumps due to currency fluctuations. Annual growth of wealth per adult averaged 8% over 2000–18. Prior to 2008, wealth also rose strongly, from $1,830 in 2000 to $5,020 in 2007. After falling 26% in 2008, it rebounded, and grew at an average rate of 7% up to 2018. Wealth per adult is estimated at $7,020 in mid-2018 after a year of slow growth in dollar terms due to an exchange rate drop of 6%.
Personal wealth in India is dominated by property and other real assets, which make up 91% of estimated household assets. This is typical for developing countries. Personal debts are estimated to be only $840, or just 11% of gross assets, even when adjustments are made for under-reporting. Thus, although indebtedness is a severe problem for many poor people in India, overall household debt as a proportion of assets in India is lower than in most developed countries.
While wealth has been rising in India, not everyone has shared in this growth. There is still considerable wealth poverty, reflected in the fact that 91% of the adult population has wealth below $10,000. At the other extreme, a small fraction of the population (0.6% of adults) has a net worth over $100,000. However, owing to India’s large population, this translates into 4.8 million people. The country has 404,000 adults in the top 1% of global wealth holders, which is a 0.8% share. By our estimates, 3,400 adults have wealth over $50 million, and 1,500 have more than $100 million.
Edited extracts from Credit Suisse Global Wealth Report 2018