Global Household Wealth Increases 4.9% to USD 241 trillion, Resurgence in the Eurozone

The Credit Suisse Research Institute today released its fourth annual Global Wealth Report 2013, which finds that from mid-2012 to mid-2013 aggregate global household wealth increased by 4.9% in current dollar terms to USD 241 trillion, despite the continuing challenges posed by the economic environment.

English: This is the Credit Suisse building on...

Credit Suisse building, Bahnhofsrtasse / Paradeplatz. (Photo credit: Wikipedia)

North America gained USD 8.4 trillion, an increase of 11.9%, fueled by a recovery in house prices and a bull equity market in the United States.  It became the lead region in terms of total net wealth for the first time since 2005, overtaking European holdings, which added USD 5.5 trillion, an increase of 7.7%.  As a result of a 22% depreciation of the Japanese yen against the US dollar during the period, household wealth in Japan dropped 20.5% to USD 22.6 trillion, dragging down total wealth in Asia Pacific by 3.7% to USD 73.9 trillion. However, Asia Pacific ex-Japan continued to register stable wealth growth by 6.2% to USD 51.3 trillion in mid-2013.

Key findings of the report include:

  • Wealth is to rise by nearly 40% in the next five years, reaching USD 334 trillion by 2018
  • Emerging markets are to increase their share of global wealth to 23% by 2018, with China alone expected to represent over 10% of global wealth then
  • The US is to remain the undisputed leader in terms of aggregate wealth, with total net worth approaching USD 100 trillion by 2018
  • Eurozone wealth per adult in 2013 has recovered more than half of the large loss experienced 12 months earlier, mainly due to rising equity prices
  • Switzerland ranks highest in average wealth, breaking the 500,000 USD level to hit a new high of USD 513,000 per adult
  • The number of millionaires worldwide is to increase by about 16 million reaching 47 million in 2018

Giles Keating, Global Head of Research for Private Banking & Wealth Management, Credit Suisse, said: “The fourth annual Credit Suisse Global Wealth Report shows a USD 11 trillion rise in wealth to over USD 241 trillion, with the US as the clear winner overtaking Europe and APAC falling back due to the sharp depreciation of the yen. We look at wealth mobility for the first time and it appears surprisingly high. For instance, less than two-thirds of the 2000-01 Forbes billionaires remained on the list by 2005, and barely half were on it by the end of the decade.”

Credit Suisse Research Institute’s Michael O’Sullivan said: “Our research shows that global wealth has doubled since 2000, quite compelling given some of the economic challenges of the last decade.  We expect this trend to continue in the foreseeable future, driven largely by Emerging Markets’ strong economic growth and rising population levels.”

Changes in Wealth from 2012-13
Total global household wealth increased in current dollar terms to USD 241 trillion, or USD 51,600 per adult in the world, an all-time high for average net worth.

In recent years, exchange rate movements versus the US dollar have significantly impacted the relative wealth rankings of individual countries.  During the year to mid-2013, exchange rates were confined to a narrower range than in the past, therefore, had less impact.  Exceptions include Japan, whose currency depreciated by 22%, and Egypt, Argentina and South Africa, which were devalued by more than 15%.

In most other parts of the world, the economic environment has been generally favorable towards wealth acquisition.  While Japan’s currency issues led to a net loss for the Asia-Pacific region, gains were recorded in all other regions.  Total wealth in North America (up 11.9%) overtook European holdings (up 7.7%) to become the lead region for the first time since 2005 (see Table 1).

Table 1: Changes in Household Wealth 2012-13 by Region

Region Total Wealth 2013

USD billion

Change in Total Wealth

2012-13 USD billion

% Change

2012-13

Africa 2,711 32 1.2%
Asia-Pacific (including China and India) 73,879 -2,859 -3.7%
Europe 76,254 5,475 7.7%
Latin America 9,139 317 3.6%
North America 78,898 8,362 11.9%
World 240,881 11,328 4.9%

Changes in Wealth from 2012-13: Focus on the Eurozone
Credit Suisse in its report details the resurgence of wealth in the Eurozone, with rising equity prices and the slightly favorable euro-dollar movement to recover more than half of the very large wealth loss experienced 12 months earlier.

Wealth per adult was 154,900 euros in mid-2013 for the Eurozone as a whole, but there are significant differences between countries. Credit Suisse estimates indicate that household wealth in Austria, Germany, Ireland, and the Netherlands is similar to the Eurozone level, but wealth is about 20% higher in Italy and Belgium, and about 50% higher in France and Luxembourg. Countries lower down the ranking include Spain and Cyprus with about 60% of the Eurozone average, Greece with half of the Eurozone average, and Estonia and Slovakia with less than 20% of the Eurozone level.

From: Credit Suisse

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