Wealth outlook for 2020-2025

Wealth outlook for 2020-2025

According to the ‘Global wealth Report 2021’, published by Credit Suisse, global wealth is projected to rise by 39% over the next five years reaching USD 583 trillion by 2025. Wealth per adult is also projected to increase by 31% and so is the number of global millionaires. The wealth pyramid, an infographic used to determine wealth distribution, will also change. The bottom segment covering adults with a net worth below USD 10,000 will likely decrease by approximately 108 million over the next five years. The lower-middle segment of the pyramid containing adults with a net worth in the range of USD 10,000 and USD 100,000 is projected to rise by 237 million adults. Most of these new members are most likely to be from lower-income countries. The upper-middle segment, consisting of adults with wealth between USD 100,000 and USD 1 million is projected to rise by 178 million adults. Most of these new members (approximately 114 million) are likely to come from upper-middle-income countries. Number of global millionaires is also projected to increase. According to the estimates made by Credit Suisse, the number of global millionaires could exceed 84 million by 2025, a rise of almost 28 million from 2020. The increase of millionaires will not only occur in developed countries such as the USA or other developed countries in Europe, but it is also expected to rapidly increase in lower-income countries. The biggest increase is expected in China, with a change of 92.7%, which is about 4.8 million new dollar millionaires. As a consequence, the number of Ultra High Net Worth Individuals (UHNWI) with net worth exceeding USD 50 million, will also increase.[16]

• The overall regional disparities evident in Figure 5 are reflected in the fact that North America and Europe together account for 57% of total household wealth, but contain only 17% of the world's adult population. The wealth share in the Asia-Pacific region (excluding China and India) is quite similar to its share of adults and the same Figure 4: Change in wealth per adult (USD), 2021 – biggest gains and losses Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook 2022 is true for China. But the adult population share is three times the wealth share in Latin America, five times the wealth share in India, and over ten times the wealth share in Africa.
• Wealth differences by race Where measured, wealth differences by race tend to be very large. For example, the 2019 Survey of Consumer Finance in the United States found that the median wealth of African Americans was just 12.8% of non-Hispanic Caucasians’ median wealth, and the the median for Hispanics was only 19.2%. In comparison, for income, the corresponding ratios were 58.4% for African Americans and 59.0% for Hispanics. The United States DFA data allow means, although not medians, to be calculated by race. At the end of 2019, mean wealth for African Americans, Hispanics, and other racial groups was 22.0%, 18.6% and 64.0%, respectively, of the mean for non-Hispanic Caucasians. The two largest groups in the Other category are indigenous people and Asians.