The wealth gap between rich and poor countries has widened again, with the difference in net financial assets per capita increasing to 22 times, up from 19 times in 2016, according to a new report.
«This performance is nothing but astonishing given the fact that 2019 was marred by social unrest, escalating trade conflicts and an industrial recession,» Allianz said in its 11th edition of the «Global Wealth Report,» published on Thursday.
The report, which looks at the debt situation of households in almost 60 countries worldwide, called 2019 «a bumper year,» with gross financial assets growing by 9.7 percent to reach €192 trillion – the biggest jump since 2005.
For the third year in a row, emerging economies, were not able to outgrow their richer peers. The regions that saw the fastest growth were by far the richest: North America and Oceania, where gross financial assets of households increased by a record 11.9 percent each.
Reforms Necessary
Despite the ongoing Covid-19 pandemic and economic slowdown, global financial assets also rose 1.5 percent in the first half of 2020, as bank deposits, fueled by generous public support schemes and precautionary savings increased by 7 percent.
«We should not fool ourselves. Zero and negative interest rates are a sweet poison. They undermine wealth accumulation and aggravate social inequality, as asset owners can pocket nice windfall profits. It’s not sustainable. Saving the day is not the same as winning the future,» Ludovic Subran, Allianz chief economist, said.
Globally, the richest 1 percent – with average net financial assets of above €1.2 million – own almost 44 percent of total net financial assets in 2019.
Singapore Climbs
Gross financial assets of households in Asia ex-Japan rose 9.9 percent in 2019 – the third-lowest level since the global financial crisis.
In net financial assets per capita terms, Singapore, which climbed in the global rankings from 16th place to 3rd in 2019, is now the richest country in the region (€116,657, +12.2 percent), followed by Taiwan (€110,706, +11.7 percent) and Japan (€103,829, +3.9 percent).
