Global financial services group Allianz’s 12th Global Wealth Report (see video here), which assesses the asset and debt situation of households in almost 60 countries, shows that South African household wealth in financial assets grew by 5% in 2020.
Allianz reports that the main driver was bank deposits, which rose by 11.3%, the fastest increase in six years. Insurance and pension fund assets, on the other hand, which are by far the most popular asset class in South Africa, accounting for more than half of all financial assets, grew by only 2.3%, one of the shallowest increase in recent years. Market-related investments showed a solid performance, increasing by 6.1%, on par with 2019.
Growth in debt was 4.3%, against an average increase of almost 6% in the previous three years.
Allianz notes that as economic output contracted in 2020, the debt ratio (household debt as a percentage of GDP) jumped to 48%, a level well above other emerging regions such as Latin America (32%) or Eastern Europe (26%) – but well below Asia (excluding Japan) where the average debt ratio stands at 61%.
Net financial assets, finally, increased by 5.2%. With net financial assets per capita of R108 000 (6 400 euros), South Africa remains in 39th place in the ranking of the richest countries. South Africa ranks ahead of Russia (42) and Brazil (43), but below China (34). As many European countries such as Italy, France, Belgium and the UK dropped quite dramatically in the ranking since 2000, the top 10 looks differently today than in 2000: it has become more of a Scandinavian-Asian affair – but with the USA and Switzerland still reigning supreme.
For the full report and rankings, go to www.allianz.com/en/economic_research.html