Global wealth drops in 2015, but inequalities widen
Global wealth has dropped in 2015 due to the strong US dollar, according to Credit Suisse Research Institute's "Global Wealth Report 2015." The underlying situation nevertheless remains positive, though wealth inequalities have continued to widen, the report said.
Global wealth reached 250 trillion dollars in 2015, slightly less than the previous year, due to adverse exchange rate movements. The underlying wealth trends do, however, generally remain positive, according to the Credit Suisse annual report. The rise in household wealth was particularly strong in the US and China between mid-2014 to mid-2015. "Wealth is (nevertheless) still predominantly concentrated in Europe and the US.
However, the growth of wealth in emerging markets has been most impressive, including a fivefold rise in China since the beginning of the century," said Credit Suisse CEO Tidjane Thiam. China now accounts for a fifth of the world population, while holding nearly 10 percent of the global wealth. The Chinese middle class is now, for the first time, the world's largest.
The wealth of the middle class has grown strongly in all regions and in almost all countries in this century. Throughout the world, the size, health and resources of the middle class are seen as key factors in determining the speed and sustainability of economic development. It is often at the heart of political movements and new consumption trends, and a major source of the business people and entrepreneurs who aim to satisfy new demands.
For a variety of reasons, the US middle class has come to epitomize the global middle class. But this year, the Chinese middle class for the first time outnumbered it. The Chinese middle class now counts 109 million adults, well ahead of the 92 million adults part of the American middle class. Globally, 14 per cent of the adult population belonged to the middle class in 2015 – 664 million adults in total. This year, middle class wealth did, however, grow at a slower pace than wealth at the top end. "Still, the middle class will continue to expand in emerging economies overall, with a lion's share of that growth to occur in Asia. As a result, we will see changing consumption patterns as well as societal changes as, historically, the middle class has acted as an agent of stability and prosperity," Thiam stressed. The Global Wealth Report defines the middle class in terms of a wealth band rather than an income range, in order to be resilient to temporary setbacks such as a spell of unemployment.
According to the report, wealth inequality has widened in the aftermath of the financial crisis and this year was no exception. This year's rise in equity prices and in the size of financial assets in high-wealth countries pushed up the wealth of some of the richest countries and people, resulting in increased wealth inequality. The top percentile of wealth holders now own just over half of the world's wealth and the richest decile 87.7 per cent.