Indian household wealth falls to $3 trillion in 2016

Hit by adverse currency movements, India's household wealth has fallen by $26 billion to $3 trillion in the current year, shows the latest report by global financial services major Credit Suisse. According to the Global Wealth Report, compiled by Credit Suisse Research Institute, wealth in the country in dollar terms went down by 0.8% ($26 billion) to $3.099 trillion in 2016 compared to last year.

The report noted that while wealth has been rising in India, not everyone has shared in this growth.

“There is still considerable wealth poverty, reflected in the fact that 96% of the adult population has wealth below $10,000,” the report said.
 

“At the other extreme, a small fraction of the population (0.3% of adults) has a net worth over $100,000,” it added, noting that due to India's large population, this translates into 2.4 million people.

According to the report, the country has 248,000 adults in the top 1% of global wealth holders, a 0.5% share.

“"By our estimates, 2,260 adults have wealth over $50 million, and 1,040 have more than $100 million,” it added.

Overall, the Asia-Pacific region in 2016 saw wealth increase by 4.5% to nearly $80 trillion.

“China and India were hit by adverse currency movements and as a result, their household wealth fell by 2.8% and 0.8% to $23 trillion and $3 trillion, respectively,” the report noted.

Among other major economies in the region, wealth in Australia remained largely unchanged (decline of 0.2%) and South Korea saw an increase of 1%.

Globally, the wealth stood at $256 trillion — a rise of 1.4% from a year ago.

The report noted that the rise in global wealth is in line with the increase in the world's adult population with average wealth per adult remaining constant at $52,800.

According to Credit Suisse, while developing economies are likely to outpace the developed world in terms of wealth growth, they will still only account for just under a third of growth over the next five years.

“They (developing nations) currently account for around 18% of global household wealth, against just 12% in 2000,” it added. “China is expected to account for more than half of this growth, with over 7% coming from India.”

Credit Suisse noted that the United States is likely to remain the engine of global wealth growth in the coming years, with the total tally reaching $112 trillion by 2021 — $28 trillion more than in 2016.

In its forecast for India, the report said that in terms of ranking, the country will probably jump to 12th spot from its current position of 14th — overtaking Switzerland and Taiwan — in the next five years.

Further, the report noted that countries in the Asia-Pacific, including China and India, currently host more than 32,000 ultra high net worth individuals as against nearly 30,000 in Europe.

“This difference in favour of APAC will increase further, and by 2021, the region is expected to add another 17,000 ultra high net worth individuals to reach a total of nearly 49,000, 39% of whom will be from China (against 34% today),” Credit Suisse said.

The report is compiled from data on the wealth holdings of 4.8 billion adults across over 200 countries — from billionaires in the top echelon to the middle and bottom sections of the wealth pyramid.