Covid leaves Indian adults 6.1% poorer in 2020: Credit Suisse
The Covid-19 pandemic which almost ended life in 2020 left Indian adults poorer by 6.1% in 2020, suggests the Credit Suisse Global Wealth Report 2021. Wealth per Indian adult in 2020, according to the report, fell to $ 14,252 by the end of 2020 from pre-pandemic levels. On a cumulative basis, Credit Suisse estimates the decline in Indian adult wealth at $ 594 billion.
“In real terms, the average level of wealth in India in 2020 was at a level seen in the United States 70 years ago. Over the next five years, wealth per Indian adult will exceed $ 20,000, an increase of over 40%, ”said Anthony Shorrocks, economist and author of the Global Wealth Report 2021 at Credit Suisse.
The decline in the wealth of Indian adults in 2020, according to Credit Suisse, was amplified by the depreciation of the exchange rate: at fixed exchange rates, the loss would have been 2.1%. Latin America was the worst performing region, with total wealth down 11.4% or $ 1.2 trillion. The Global Wealth Report 2021 was compiled from wealth data for 5.2 billion adults in 200 countries.
“Wealth inequalities in India grew at a slower pace than in China, but were already very high in 2000. The Gini coefficient – an index used to measure wealth inequality – fell from 74.7 in 2000 to 82.0 in 2019, and reached 82.3 at the end of 2020. The wealth share of the richest 1% increased from 33.5% in 2000 to 39.5% in 2019, and increased further to reach 40.5% by the end of 2020, ”says the Credit Suisse report.
Aggregate global wealth, according to Credit Suisse estimates, increased by $ 28.7 trillion to $ 418.3 trillion by the end of 2020 despite the pandemic.
“In terms of current US dollars, total wealth increased by 7.4% and wealth per adult by 6.0%. However, the widespread depreciation of the US dollar accounted for 3.3 percentage points of growth. If the exchange rates had remained the same as in 2019, total wealth would have increased by 4.1% and wealth per adult by 2.7%, ”said Credit Suisse.
Developed regions were better off in 2020. Total wealth increased by $ 12.4 trillion in North America and $ 92 trillion in Europe, according to the report. Total debt, on the other hand, rose sharply in China and Europe, but fell in Africa and Latin America, even after accounting for exchange rate depreciation.
“These two regions accounted for the bulk of wealth gains in 2020, with China adding an additional $ 4.2 trillion and the Asia-Pacific region. Total debt rose 7.5% and likely would have grown much more if households had not been forced to save more by spending constraints, “Credit Suisse said. CLICK HERE FOR THE TABLE
Going forward, global wealth, according to Credit Suisse estimates, is expected to increase by 39% over the next five years, to reach $ 583 trillion by 2025. Low- and middle-income countries are responsible for 42% of the growth, although they represent only 33% of the current wealth.
“Wealth per adult is expected to increase by 31%, surpassing the $ 100,000 mark. Unadjusted for inflation, the number of millionaires will also increase markedly over the next five years to 84 million, while the number of very high net worth individuals (UHNWI) is expected to reach 344,000, ”said Credit Suisse.