Question: Consider the following statements regarding Global Wealth report 2019:
(1) US has contributed the most towards global wealth growth
(2) India is the one of the fastest wealth creators in the world
From the above correct statement/s is/are:
(a) Only(1)
(b) Only (2)
(c) Both (1) and (2)
(d) None of the above
Answer: (c)
Related facts:
- The tenth anniversary edition of the Global wealth report published by the Credit Suisse Research Institute is the most comprehensive and up-to-date source of information on global household wealth.
- Global wealth grew during the past year by 2.6% to USD 360 trillion and wealth per adult reached a new record high of USD 70,850, 1.2% above the level of mid-2018 with Switzerland topping the biggest gains in wealth per adult this year.
- The US, China, and Europe contributed the most towards global wealth growth with USD 3.8 trillion, USD 1.9 trillion and USD 1.1 trillion respectively.
- This year’s report also provides a deep dive into wealth in the 21st century.
- While the century began with a “golden age” of robust and inclusive wealth creation, wealth growth collapsed during the financial crisis and never recovered to the level experienced earlier.
India’s context:
- India’s total household wealth grew by 5.2% in dollar terms in the period, the Credit Suisse Global Wealth Report released on October 21, 2019.
- Net wealth per adult grew at 3.3%, sharply slower than the average 11% growth rate reported in the 20 years to 2019.
- India, however, remains one of the fastest wealth creators in the world, with household wealth in dollar terms growing faster than any other region.
- The slowdown in wealth creation coincides with a downturn in the Indian economy, which grew at the slowest pace in six years in the three months ended 30 June.
- Growth in private consumption expenditure also slumped to an 18-quarter low of 3.1% in the June quarter, indicating a negative wealth effect.
- Overall, the Credit Suisse report found that non-financial assets of Indian households grew by 6.9% in 2018-19, outpacing the 1.4% growth in financial assets.
- The last time household wealth grew at a slower pace was in 2017-18, when it expanded 2.6%. But that was largely due to the sharp weakening of the rupee in that year — a 7-8% rise in asset values was offset by an almost 5% currency depreciation.
- In 2018-19, Indian asset prices grew at a slower pace of nearly 6% but foreign exchange fluctuations were more favourable.
- The report estimates wealth per Indian adult at $14,569 (₹10.31 lakh as on 21 October). However, the average number is skewed heavily by a few wealthy individuals.
- The report estimates that 78% of India’s adult population has wealth below $10,000, while 1.8% of India’s population has more than $100,000.
- At the other extreme, 1,790 adults have wealth over $100 million. India accounts for 2% of the world’s millionaires.
- Indians hold an average of about $13,000 in physical assets and roughly $3,000 in financial assets. There is also a debt of $1,345 per adult.
- The Credit Suisse report also found that the increase in household wealth in India in 2018-19 was mostly driven by rising home prices.
Links:
https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html
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