The world is getting richer overall. But these gains aren’t being distributed evenly. Some countries are accumulating wealth at eye-watering speed, while others are struggling to make headway.
During the 12 months to mid-2018, total global household wealth increased by almost $14 trillion to $317 trillion – a growth rate of 4.6%, according to Credit Suisse’s latest Global Wealth Report.
Meanwhile, average wealth rose by 3.2% to a record $63,100 per adult. However, as the infographic below shows, North America and Europe saw the most dramatic gains.
Together, these two regions hold 60% of total household wealth, but are home to only 17% of the world’s adult population.
The world’s wealth rankings
The US is enjoying a “seemingly relentless rise” in household wealth, the report noted. Total wealth and wealth per adult has grown every year since the 2008 global financial crisis, despite overall global wealth shrinking in 2014 and 2015.
Over the past year, North America added $6.5 trillion to its total household wealth, nearly all of it ($6.3 trillion) in the US.
During the same period, Europe contributed an additional $4.4 trillion to its stock of household wealth, and Asia-Pacific (excluding China and India) almost $1 trillion.
Latin America was the only region that saw a drop in household wealth. This was partly due to economic turbulence in Argentina and Brazil, the report said.
China has now firmly secured the number two spot in the world’s wealth rankings, adding $2.3 trillion to its total household wealth in the past year.
It overtook Japan in terms of the number of ultra-high net worth (UHNW) individuals in 2009, total wealth in 2011 and the number of millionaires in 2014.
But the report points out that mean wealth per adult in China ($47,810 in mid-2018) is still far below levels in Japan ($227,240).
Switzerland ($530,240), Australia ($411,060) and the US ($403,970) again dominate the league table of mean wealth per adult.
A slightly different picture emerges when countries are ranked by median wealth per adult, a measure that Credit Suisse said favours nations with lower levels of wealth inequality. This year, Australia ($191,450) moved into first place, overtaking Switzerland ($183,340).
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Growth in millionaires
Over the next five years, global wealth is forecast to rise by nearly 26%, totalling $399 trillion by 2023. A third of this growth is set to be in emerging markets, even though they account for only about a fifth of current wealth, the report said.
The expanding middle classes will drive much of this increase in wealth, but the number of millionaires will also grow rapidly to reach a record 55 million by 2023.
Currently there are 42.2 million millionaires worldwide, up 2.3 million over the past year.
The report said that while the bottom 50% collectively owns less than 1% of global wealth, the richest 10% of adults owns 85%. The top 1% alone accounts for almost half of all household wealth (47%).
An Oxfam report, launched in January at the World Economic Forum Annual Meeting in Davos, found that the poorest half of the world hasn’t seen an increase in wealth since 2010.
In contrast, billionaire wealth has grown by an annual average of 13% – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2%, the Oxfam report said.
The good news is that the gap between rich and poor has stopped getting wider, at least for now. Credit Suisse’ research found that wealth inequality hasn’t risen in the past year, although it has yet to fall significantly.
Women and wealth
Women have been making strides towards closing the wealth gap. Their levels of household wealth – notably in China, Europe and North America – have been increasing.
“More self-made women are succeeding in business and are entering the highest wealth ranks,” wrote Credit Suisse Chairman Urs Rohner in the report’s introduction.
“Despite this trend, even in those countries where progress is the strongest, some categories of women – such as single mothers and divorcees – remain disadvantaged.
“While more is required to be done to ensure that women have an equal opportunity to build up, inherit and share in wealth, there are signs that progress has been happening in many parts of the world.”