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News > Switzerland

Global Wealth Increased in 2020 Despite the Pandemic

  • People walk through Times Square in New York, U.S., May 14, 2021.

    People walk through Times Square in New York, U.S., May 14, 2021. | Photo: Xinhua

Published 22 June 2021
Opinion

The widening of the gap between rich and poor was accompanied by the loss of over 140 million jobs.

In its 2021 Global Wealth Report (GWR), the Credit Suisse Research Institute highlighted that accumulated wealth increased 7.4 percent in 2020 despite the COVID-19 pandemic. At the end of that year, global wealth reached US$418.

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Unlike what happened during the 2008 financial crisis, most governments implemented decisive and swift policies to recover production levels.

"The speed and unprecedented nature of the policies that were taken reversed the decline in the markets," said Nannette Hechler, Credit Suisse's Chief Investment Officer of International Wealth Management.

Between January and March 2020, 4.4 percent of global household wealth was lost, and global wealth per adult declined by 4.7 percent. However, the recovery was fairly rapid, allowing for 7.4 percent year-on-year growth in wealth.

"Wealth creation in 2020 appears to have been completely disconnected from the economic disaster caused by COVID-19," said Anthony Shorrocks, lead author of the 2021 GWR.

The regions where the increase in wealth was most notable were North America (12.4 percent), Europe (9.2 percent), and China (4.2 percent). In contrast, the largest declines in wealth creation occurred in India (-4.4 percent) and Latin America (-11.4 percent).

The 2021 GWR also confirmed an increase in the trend towards the concentration of income in a small number of people. Globally, 56 million people, which represent 1.1 percent of the adult population, possess individual fortunes above US$1 million and collectively control US$192 billion.

On the other hand, 55 percent of the adult population (2.8 billion people) have less than US$10,000 as individual wealth. This widening of the gap between rich and poor was accompanied by the loss of over 140 million jobs in 2020.

The Credit Suisse Bank holds that global wealth will increase by 39 percent in the next five years and will reach US$583 billion in 2025. This will happen even though the recovery of employment in all regions will not occur until 2023.

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