According to the Credit Suisse Global Wealth Report 2021, the pandemic that had brought life to a near standstill in 2020 has left Indian adults poorer by a significant 6.1 per cent in 2020. According to the report, the Wealth per Indian adult in 2020 dropped to $14,252 by 2020-end compared to the pre-pandemic levels. Talking about the calculation on the cumulative basis, Credit Suisse estimates the drop in the wealth of Indian adults at $594 billion.
Anthony Shorrocks, economist and the author of the Global Wealth Report 2021 at Credit Suisse stated that “In real terms, the average wealth level in India in 2020 was at a level seen in the United States 70 years ago. In the next five years, wealth per Indian adult will surge past $20,000, a rise of over 40 per cent”.
The drop in the wealth of Indian adults in 2020, according to Credit Suisse, was amplified by exchange rate depreciation. On the other hand, at fixed exchange rates, the loss would have been at 2.1 per cent. According to the study, Latin America was the worst performing region. Its total wealth has reportedly dropped by 11.4 per cent or $1.2 trillion. The Global Wealth Report 2021 has been compiled from data on the wealth holdings of 5.2 billion adults across 200 countries.
The report stated that “Wealth inequality in India has risen at a slower pace than in China, but was already very high in 2000. The Gini coefficient – an index used to measure wealth inequality – increased from 74.7 in 2000 to 82.0 in 2019, and reached 82.3 at the end of 2020. The wealth share of the top 1 per cent went up from 33.5 per cent in 2000 to 39.5 per cent in 2019, and rose further to 40.5 per cent by the end of 2020,”.
Aggregate global wealth, according to Credit Suisse estimates, rose by $28.7 trillion despite the pandemic. Credit Suisse additionally stated that “In terms of current US dollars, total wealth grew by 7.4 per cent and wealth per adult was up 6.0 per cent. However, widespread depreciation of the US dollar accounted for 3.3 percentage points of the growth. If exchange rates had remained the same as in 2019, total wealth would have grown by 4.1 per cent and wealth per adult by 2.7 per cent,”.
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Reportedly, the developed regions were better off in 2020. North America’s total wealth rose by $12.4 trillion and Europe’s total wealth rose by $9.2 trillion. On the other hand, total debt, rose markedly in China and Europe, but declined in Africa and in Latin America, even after allowance was made for exchange rate depreciation.
The report stated that “These two regions accounted for the bulk of the wealth gains in 2020, with China adding another $4.2 trillion and the Asia-Pacific region. Total debts increased by 7.5 per cent and would likely have increased much more if households had not been obliged to save more by the constraints on spending,”.