Private wealth will grow more slowly because the global economy is not advancing as quickly as expected, Credit Suisse Group AG yesterday said in its annual wealth report.
Wealth is now expected to climb 6.6 percent a year to US$345 trillion through June 2020, the Zurich-based bank said. That compares with last year’s projection of an increase of 7 percent a year to US$369 trillion by 2019.
“The global economic outlook is weaker than previously expected,” the world’s fourth-largest wealth-management firm said in the report. “This leads us to revise our projections downwards.”
Private wealth measured in US dollars fell 4.7 percent to US$250.1 trillion in the 12 months through June 30, the first decline since the 2008 financial crisis, as the greenback rose against other currencies, Credit Suisse said.
Net worth valued in US dollars dropped in every region except China and North America during the period, it said.
The bank’s prediction is based on the global economy accelerating “slightly” and China’s economy “stabilizing” as it continues its transition toward consumption and services.
The global economy is expected to grow 3 percent this year, compared with 3.4 percent last year, according to the median estimate of 43 economists surveyed by Bloomberg. Growth is expected to revert to 3.4 percent next year and in 2017, the survey showed.
While wealth has doubled since 2000, including a fivefold increase in China, the pace of growth has slowed in recent years, Credit Suisse said. The richest 0.7 percent of the world’s population own 45.2 percent of global wealth, it said.
A stronger US dollar led to the number of super-rich with a net worth of more than US$50 million declining by 800 since the middle of last year.
The US dollar climbed 8 percent against the British pound, 17 percent versus the yen and 19 percent versus the euro in the 12 months to June, the report said.
Wealth growth in Europe may outpace the rate of growth in the US over the next five years, although the US is expected to remain the richest nation, with almost US$113 trillion by 2020, compared with US$85.9 trillion this year.
Credit Suisse sees emerging markets outpacing higher-income countries, even after a plunge in China’s stock market in June and the devaluation of the yuan triggered a sell-off across financial markets over the summer.
Wealth in China will surge more than 9 percent a year, based on the country’s economy advancing 6.2 percent a year, Credit Suisse said.
The number of millionaires will probably increase 46 percent to 49.3 million over the next five years, with Malaysia more than doubling the number of affluent individuals with US$1 million or more, the bank said.
Millionaires will increase at least 70 percent in Taiwan, China, Saudi Arabia, Colombia and Poland, the bank’s report said.
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