A logo of Swiss bank Credit Suisse is seen on a building in Zurich.
A logo of Swiss bank Credit Suisse is seen on a building in Zurich.

Household wealth ‘unscathed’ despite pandemic, Credit Suisse says

By Bloomberg Time of article published Oct 24, 2020

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INTERNATIONAL - While the pandemic has led to a decline in individual fortunes, household wealth has held up.

That’s one of the main findings in Credit Suisse Group AG’s 2020 Global Wealth Report released Thursday. Thanks to government and central-bank actions to mitigate the Covid-19 fallout, global wealth rebounded from an initial slump in the first quarter of the year, adding $1 trillion by June after ending 2019 at $399.2 trillion.

“Given the damage inflicted by Covid-19 on the global economy, it seems remarkable that household wealth has emerged relatively unscathed,” said economist Anthony Shorrocks, one of the report’s authors, adding as a caveat that the findings are based on provisional household balance sheets for the second quarter issued by few countries.

That said, only China and India saw gains in household wealth in the first half of the year, growing by 4.4% and 1.6%, respectively. Latin America, on the other hand, suffered the most, with a 13% plunge, as currency devaluations aggravated losses in gross domestic product.

Wealth per adult slipped to an average $76,984 from $77,309 at the start of the year, the report found. Switzerland, the Netherlands, Taipei and Hong Kong saw gains, while Norway and the U.K. posted the biggest declines.

The number of millionaires remained stable after soaring to 51.9 million last year, while the club of the ultra-high net worth individuals with more than $50 million in net assets lost only 120 members to 175,570. In the U.S., which has the most people in the top 1% wealth group and 39% of the world’s millionaires, the inequality gap has narrowed, according to the report.

The findings come as wealth gains, especially in the U.S. tech world, have been increasingly scrutinized as millions lost their jobs due to the coronavirus hit. Amazon.com Inc.’s Jeff Bezos -- the world’s richest person -- has amassed more than $73 billion this year, taking his fortune to $188 billion, according to the Bloomberg billionaires Index. Facebook Inc.’s Mark Zuckerberg has gained $27 billion to more than $105 billion, while the rise of Zoom Video Communications Inc. has pushed up Chairman Eric Yuan’s net worth by $22 billion.

Overall, the world’s 500 richest people have added $970 billion to their combined wealth this year, the Bloomberg index shows.

Female workers, millennials and minorities were hit the most by the pandemic, mainly because of their high representation in businesses such as restaurants, hotels and retail that have been badly affected. Millennials, which also suffered the repercussions from the financial crisis, and the next post-Covid generation will have to deal with reduced economic activity and globalization, as well as discouraged travel, Credit Suisse said.

“There is the promise of many more surprises to come,” said Nannette Hechler-Fayd’herbe, Credit Suisse’s chief investment officer for international wealth management and global head of the economics and research unit. “Among the major economies, China is likely to be the clear winner.”

BLOOMBERG

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