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The coronavirus pandemic has caused misery and economic damage around the world, but it has also been a reward for the rich, with an estimated 5.2 million people who became millionaires last year, while the number of these worth at least $ 50 million increased by almost a quarter.
A Credit Suisse report found that the global wealth accumulated by households increased by about $ 28.7 million in 2020, as central banks flooded financial markets with cheap money and inflated asset prices.
Higher valuations of heritage and residential properties raised the aggregate net worth of households (assets, including real estate, less debt) to about $ 418.3 million. The increase amounted to a 4.1% increase in constant currency, just slightly below the annual average of the last two decades, even when world economies struggled with the health crisis and blockade restrictions.
“The contrast between what has happened with household wealth and what is happening in the economy as a whole has never been more intense,” the Credit Suisse report said. It was found that the richest benefited more from an asset-inflated political response, with the gap between rich and poor widening in most countries.
The combined wealth of people with a net worth of at least $ 1 million had quadrupled since 2000 to $ 191.6 million, while their share of global wealth rose from 35 per cent. one hundred to 46 percent.
An estimated 2.9 billion people (equivalent to 55% of all adults) meanwhile had net assets of less than $ 10,000. “The differences in wealth between adults widened in 2020 for the world at large and also in most countries,” said the newspaper, co-authored by economists Anthony Shorrocks, James Davies and Rodrigo Lluberas.
The study estimated that there were $ 56.1 million worldwide by the end of 2020, an increase of $ 5.2 million from the previous year. About a third of the new millionaires came from the US.
Although approximately 90% of millionaires had a net worth of less than $ 5 million, it is estimated that about 7 million had more than that amount. At the highest end, 215,030 had net worth in excess of $ 50 million, up from 173,620 the previous year.
“This would mean a very high increase in any year, but it is particularly surprising in a year experiencing economic and social upheavals,” the authors wrote. “The nature of the political response to the pandemic has, of course, been a major influence.”
Millionaires were uncommon in India, Indonesia and Russia, about one in a thousand adults, and also relatively uncommon in China, one in 200. This compares with 8% of the population in the US and 15% in Switzerland. Credit Suisse’s methodology included real estate wealth and reversible assets.
Countries severely affected by coronavirus were among those that recorded the largest expansion of household net worth. The study found that gains were highest in North America and Europe, where total wealth increased by about 10%.
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