In 2021, despite the force of the pandemic, the planet’s wealthiest inhabitants accumulated 45.6 per cent of global wealth. The amount of money concentrated in the hands of the richest 1 per cent was up on the year before, thanks to the volume of assets hoarded and the addition of 5 million new millionaires.
A recent report published by Swiss bank Credit Suisse states that almost half of these newly-rich live in the United States and that, as a whole, they represent the biggest registered increase in any country in any year of this century.
According to financial consulting company Bloomberg, the number of millionaires worldwide will increase by 40 per cent in the next five years, despite rising interest rates and the war in Ukraine causing the collapse of asset classes and private fortunes this year.
The Credit Suisse report also includes an increase in aggregate global wealth, which last year grew by 9.8 per cent to reach 463.6 trillion dollars, with the United States and China at the top of the list of countries adding the most.
The United States added a little over half of the global increase in wealth, while China added another quarter. Together, Africa, Europe, India and Latin America accounted for just 11.1 per cent of global wealth growth.
As for the forecast over the next five years, the report predicted that middle-income countries will be the main driver of the global economy, generating an expected 42 per cent of wealth growth.
According to Credit Suisse, global wealth inequality has fallen this century due to faster growth in emerging markets. The Swiss bank confirms that 2021 was a good year, financially speaking, as the reduction in interest rates and central bank policies designed to mitigate the pandemic-induced crisis favoured growth in household wealth.
Credit Suisse is cautious in its outlook for 2022, maintaining that the conflict in Ukraine, inflation and rising interest rates are likely to hamper household wealth creation in the short term.
The reality is that the slight recovery in 2021 was followed by increasingly bleak development as risks began to materialize: global production contracted in the second quarter of the year due to a slowdown in China and Russia, while consumer spending in the United States did not reach the levels expected.
Moreover, other shocks affected a global economy already weakened by the pandemic, including higher than expected worldwide inflation, especially in the United States and key European economies, leading to a tightening of financial conditions. No less aggressive is the impact of the sanctions imposed by Washington and Brussels on Russia due to its invasion of Ukraine, the boomerang effect of which is felt in European household budgets due to scarcity and high energy and food prices. PL
(Translated by Rebecca Ndhlovu – Email: rebeccandhlovu@hotmail.co.uk) – Photos: Pixabay
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