The gap between super-rich and the rest of the world expands after 2008 financial crisis

Ten years from the onset of the global financial crisis, global wealth has grown by 27%, according to Credit Suisse Research Institute’s 2017 Global Wealth Report.

The world’s richest people have seen their share of the globe’s total wealth increase from 42.5% at the height of the 2008 financial crisis to 50.1% in 2017, or $140tn, according to Credit Suisse’s global wealth report published on Tuesday.

In the year to mid-2017, total global wealth rose at a rate of 6.4%, the fastest pace since 2012 and reached $280 trillion, a gain of $16.7 trillion. This reflected widespread gains in equity markets matched by similar rises in non-financial assets, which moved above the pre-crisis year 2007’s level for the first time this year. Wealth growth also outpaced population growth, so that global mean wealth per adult grew by 4.9% and reached a new record high of $56,540 per adult.

Urs Rohner, Chairman of the Credit Suisse Research Institute and Chairman of the Board of Directors of Credit Suisse Group, commented: “A decade since the start of the global financial crisis, we see a significant increase in wealth across all regions of the world. In our home market, Switzerland, wealth per adult has increased by more than 40% during this period and continues to lead the global rankings. In this year’s edition of the Credit Suisse Research Institute’s annual Global Wealth Report, we explore the wealth prospects of the Millennial generation, which emerges from a more challenging period than its predecessors.”

This year’s report focuses in on Millennials and their wealth accumulation prospects. Overall the data point to a “Millennial disadvantage”, comprising among others tighter mortgage rules, growing house prices, increased income inequality and lower income mobility, which holds back wealth accumulation by young workers and savers in many countries. However, bright spots remain, with a recent upsurge in the number of Forbes billionaires below the age of 30 and a more positive picture in China and other emerging markets.

The US continued its unbroken spell of gains since the financial crisis, bolstered by strong market conditions. It added $8.5 trillion to the stock of global wealth, which is half of the wealth generated globally over the 12 months to mid-2017.

Stability in Europe enabled wealth growth of 6.4% across the continent, in line with global wealth growth. Four Eurozone countries (Germany, France, Italy, Spain) made it to the top ten countries with the biggest gains in absolute terms. The UK market recovered after the losses caused by the Brexit vote last year but the outlook remains uncertain.

Switzerland once again ranked as the global leader in terms of both average and median wealth per adult in 2017, with $537,600 (CHF528,000), followed by Australia ($402,600), the United States ($388,600) and New Zealand ($337,400). Since 2000, average wealth per adult in Switzerland has risen by 130%, largely due to the appreciation of the Swiss franc against the US dollar between 2001 and 2013, the report said. The top ten in the wealth-per-adult league in 2017 also include five other European countries: Norway, Denmark, Belgium, the UK and France. The Eurozone’s total wealth of $53 trillion in 2017 is comparable to the total wealth of the US at the end of the 1990s.

Median wealth has risen in most regions, while remaining below the peak level of 2007. Only China has reached a new median wealth high. The top ten ranking by median wealth corresponds closely to the ranking by mean wealth, although lower-than-average inequality promotes Italy and Japan to a place among the top ten.

In the mid-term, emerging economies are expected to generate wealth at a more dynamic pace than their developed peers.

The report said the poor are mostly found in developing countries, with more than 90% of adults in India and Africa having less than $10,000. “In some low-income countries in Africa, the percentage of the population in this wealth group is close to 100%,” the report said. “For many residents of low-income countries, life membership of the base tier is the norm rather than the exception.”