BUSINESS

Wealth Is Increasing In India, But Not Everyone Is Sharing The Growth: Credit Suisse

India's household wealth has fallen by $26 billion this year.

23/11/2016 8:23 AM IST | Updated 23/11/2016 8:56 AM IST
NEW! HIGHLIGHT AND SHARE
Highlight text to share via Facebook and Twitter
Getty Images

MUMBAI -- Hit by adverse currency movements, India's household wealth has fallen by $26 billion to $3 trillion in the current year, shows the latest report by global financial services major Credit Suisse.

According to the 'Global Wealth Report' compiled by Credit Suisse Research Institute, wealth in the country in dollar terms went down by 0.8 per cent ($26 billion) to $3.099 trillion in 2016 compared to last year.

The report noted that while wealth has been rising in India, not everyone has shared in this growth.

"There is still considerable wealth poverty, reflected in the fact that 96 per cent of the adult population has wealth below $10,000," the report said.

"At the other extreme, a small fraction of the population (0.3 per cent of adults) has a net worth over $1,00,000," it added, noting that due to India's large population, this translates into 2.4 million people.

As per the report, the country has 2,48,000 adults in the top 1 per cent of global wealth holders, a 0.5 per cent share.

"By our estimates, 2,260 adults have wealth over $50 million, and 1,040 have more than $100 million," it added.

2,260 adults have wealth over $50 million, and 1,040 have more than $100 million.

Overall, the Asia Pacific region in 2016 saw wealth increase by 4.5 per cent to nearly $80 trillion.

"China and India were hit by adverse currency movements and as a result, their household wealth fell by 2.8 per cent and 0.8 per cent to $23 trillion and $3 trillion, respectively," the report noted.

Among other major economies in the region, wealth in Australia remained largely unchanged (decline of 0.2 per cent) and South Korea saw an increase of 1 per cent.

Globally, the wealth stood at $256 trillion — a rise of 1.4 per cent from a year ago.

The report noted that rise in global wealth is in line with the increase in the world's adult population with average wealth per adult remaining constant at $52,800.

According to Credit Suisse, while developing economies are likely to outpace the developed world in terms of wealth growth, they will still only account for just under a third of growth over the next five years.

"They (developing nations) currently account for around 18 per cent of global household wealth, against just 12 per cent in the year 2000," it added.

"China is expected to account for more than half of this growth, with over 7 per cent coming from India," it added.

Credit Suisse noted that the United States is likely to remain the engine of global wealth growth in coming years, with the total tally reaching $112 trillion by 2021 — $28 trillion more than in 2016.

In its forecast for India, the report said that in terms of ranking, the country will probably jump to 12th spot from its current position of 14th — overtaking Switzerland and Taiwan — in the next five years.

Further, the report noted that countries in the Asia-Pacific, including China and India, currently host more than 32,000 ultra high net worth individuals as against nearly 30,000 in Europe.

"This difference in favour of APAC will increase further, and by 2021, the region is expected to add another 17,000 ultra high net worth individuals to reach a total of nearly 49,000, 39 per cent of whom will be from China (against 34 per cent today)," Credit Suisse said.

The report is compiled from data on the wealth holdings of 4.8 billion adults across over 200 countries from billionaires in the top echelon to the middle and bottom sections of the wealth pyramid.

Also On HuffPost:

How You're Throwing Money Away While Traveling

More On This Topic