Household wealth in India fell by 6.1% in 2020: Credit Suisse
MUMBAI: The Credit Suisse Global Wealth Report released on Monday showed that household wealth in India fell 6.1% in dollar terms in 2020. In rupee terms, the fall was less at 3.7%. The drop occurred on the back of a sharp contraction in value of non-financial assets such as real estate. According to Credit Suisse, these fell by 8.4% more than offsetting a 2% gain in financial assets as the stock market staged a rebound from the first wave of the pandemic.
On an aggregate, global wealth rose $28.7 trillion to reach $418.3 trillion at the end of the year. As per current value of dollar, wealth in the world grew 7.4% wealth per adult was up 6.0%. North America Europe accounted for the bulk of the wealth gains in 2020.
According to Credit Suisse, inequality in India also rose on the back of recovering share prices.
“The Gini coefficient increased from 74.7 in 2000 to 82.0 in 2019, reached 82.3 at the end of 2020,” the report said. The Gini coefficient is a measure of inequality with a higher figure denoting higher levels of inequality. “The wealth share of the top 1% went up from 33.5% in 2000 to 39.5% in 2019, rose further to 40.5% by the end of 2020. The increases in both China India in 2020 partly reflect the sizable gains in share prices over the year in the two countries,” the Credit Suisse Report said.
Inequality rose across the world according to the report. “The global number of millionaires expanded by 5.2 million to reach 56.1 million. As a result, an adult now needs more than USD 1 million to belong to the global top 1%. The ultra high net worth (UHNW) group added 24% more members, the highest rate of increase since 2003,” the report said. UHNWs have a net worth above $50 million.
The report also highlighted the higher share of financial assets among Chinese households compared to Indian ones. According to the report, in China, financial assets now account for 44.2% of gross household assets compared to 36.4% in 2000. The corresponding ratios in India are 23.3% 24.1%. The growth of financial assets has been quicker in China due to both high saving strong stock market performance in most years. Since 2000, financial assets per adult have risen by 16.5% on average in China, far ahead of what is still a good performance in India, where the average annual growth rate was 8.7%, it said.
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