World recorded 5.2m millionaires last year despite COVID-19 – Report
THE global wealth gap widened during the pandemic, swelling the ranks of the world’s millionaires by 5.2 million as the rich cashed in on surging stock and house prices.
The figures, detailed in the annual Credit Suisse Global Wealth Report, capture how emergency interest rate cuts and government stimulus measures often benefitted those least in need of state support, helping their assets grow in value despite the economic downturn.
Dollar millionaires now account for more than 1 per cent of the global population for the first time in history. The figures show that 56.1 million individuals had assets worth more than $1million (£720m) in 2020.
Contrasting fortunes at the top and the bottom were highlighted, as those already on lower earnings suffered job losses and a drop in income due to the economic slowdown.
“The rise in wealth inequality was likely not caused by the pandemic itself, or its direct economic impacts, but was instead a consequence of actions undertaken to mitigate its impact, primarily lower interest rates,” the report said.
Actions to offset the effects of the pandemic contributed to a sizeable increase in wealth inequality, and led to the widest wealth gap since 2016.
While United States accounted for nearly a third of the world’s 5.2 million new millionaires last year, adding 1.7 million to the country’s total, now at 22 million, Germany followed with another 633,000 millionaires leading to United Kingdom in sixth with 258,000 millionaires to bring to 2.5 million individuals with assets worth more than $1million in the country now.
Also, share prices, which collapsed in the first half of 2020, recovered in the later months of the year, increasing the wealth of men, middle-aged people and wealthier individuals in general.
Homeowners in most markets also benefited from rising house prices, which increased by an average of 5.6per cent in 2020, according to a separate report by the Knight Frank global house price index which tracks prices across 56 countries. That was the fastest pace of growth for three years.
In total, global wealth grew by 7.4 per cent in 2020 to $418.3 trillion in 2020, with gains largely attributed to growth in the US, Europe and China, while overall wealth in Latin America and India declined.
It will be recalled that global wealth is expected to rise a further 39 per cent over the next five years to reach $583 trillion by 2025 while number of millionaires is forecast to jump by nearly 50 per cent to 84 million individuals with the group rich enough to be counted as ultra-high net worth is also expected to expand by nearly 60 per cent to reach 344,000 people.
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