Indian household wealth grows modest 2.6% in 2018 on rupee fall

Global household wealth rose 4.6 percent in the 12-month period to June 2018, helped by a strong rise in the US and China, while India recorded a more modest 2.6 percent growth.

This is according to Credit Suisse Research Institute’s 2018 Global Wealth Report, which expects wealth to rebound sharply in India and grow at an average 8 percent over the next five years to touch $8.8 trillion.

The term wealth is defined as the value of financial assets (such as stocks and fixed interest instruments) plus real assets (such as property and gold) owned by the households, minus their debts.

The currency depreciation against the US dollar affected wealth trends in some of the major regional economies such as Australia and India, John Woods, Chief Investment Officer Credit Suisse-Asia Pacific, said.

India

In 2018, in USD terms wealth in India grew a modest 2.6 percent to around $6 trillion and wealth per adult stayed flat at USD 7,020.

However, holding exchange rates constant, total wealth grew strongly at 9.7 percent.

Interestingly, personal wealth in India was dominated by property and other real assets, which make up 91 percent of estimated household assets. Over the 12 months, non-financial assets grew by 4.3 percent, accounting for all of the wealth growth in India.

House-price movements are a proxy for the non-financial component of household assets, which reached a high of 9 percent for India.

By mid-2018, there were an estimated 3.43 lakh millionaires in India, a rise of 7,300, and 3,400 ultra high net worth individuals with wealth over USD 50 million, sixth highest in the world, after US, China, Germany, UK and  Japan.

According to the report, India may host 5.26 lakh millionaires, an increase of more than 53 percent or 8.9 percent per annum.

The report estimates that women’s share of global wealth is around 40 percent, while recent studies for India indicate a significantly lower share ranging between 20 percent and 30 percent.

Among major countries, India has one of the highest proportion of female billionaires at 18.6 percent.

Global picture

The US contributed most to global wealth, adding $6.3 trillion, taking its total to $98 trillion and continuing its unbroken run of growth in total wealth and wealth per adult every year since 2008.

China now has the second largest household wealth, having added $2.3 trillion to reach $52 trillion. China’s wealth is projected to grow by a further USD 23 trillion in the next five years, taking its share of global wealth from 16 percent in 2018 to just above 19 percent in 2023.

Over the past 12 months, non-financial assets have continued their accelerated growth, providing the impetus for overall growth in all regions except North America, accounting for 75 percent of the rise in wealth in China and Europe, and all of the rise in India.

Switzerland and Australia highest average wealth globally

Globally, Switzerland remains the richest nation in the world in terms of wealth per adult with $530,240 in mid-2018, followed by Australia (USD 411,060), with Singapore (USD 283,120) ranking ninth major economies.

Among other Asia Pacific countries, Japan’s median wealth ranked seventh highest at  $103,860 and Singapore tenth at $91,660.

Wealth outlook

Global wealth is projected to rise by nearly 26 percent or 4.7 percent per annum over the next five years, reaching $399 trillion by 2023.

Emerging markets wealth will grow at a faster rate of 7.3 percent per annum and will be responsible for 32 percent of the growth, despite accounting for just 21 percent of the current wealth.

Wealth in Asia-Pacific is expected to grow by 5.9 percent per annum or 33.1 percent to reach $153 trillion in 2023.

In Asia-Pacific, the number of millionaires is expected to rise 7.6 percent per annum to reach 15 million in 2023, while the UHNW (ultra high networth wealth) segment is forecast to grow to around 58,300 at 8 percent annually, with 46 percent in China.