Mumbai: India has lost at least $699 billion of its household wealth between mid-2011 and mid-2012 because of the economic downturn, according to the third annual global wealth report by Credit Suisse AG, released on Wednesday. With a total household wealth of $3,193 billion, India has been one of the worst performing emerging economies in the world in the past year.
According to the report, the total global household wealth fell 5.2% in current dollar terms to $223 trillion, the first decline since the financial crisis of 2007-08. Credit Suisse attributed the loss to the ongoing economic uncertainties, especially those affecting euro zone countries. A recession in many countries, combined with widespread equity price declines and relatively subdued housing markets, produced the worst environment for wealth creation since the outbreak of the financial crisis.
India currently has around 1,550 ultra-high net worth individuals with wealth of at least $50 million each and 700 with at least $100 million each, according to the report.
Credit Suisse said India’s extreme wealth inequality and immense population means that it also has a significant number of members in the top wealth echelons. Forty-two percent of the mass affluent in the country consists of self-made billionaires, which is less than the average for the entire Asia-Pacific region.
“An interesting contrast is that 95% of adults in India have less than $10,000, whereas this percentage is only 60% in China,” the report said.
Europe has lost the maximum household wealth in the period. “The relative stability of the US economy has led to an appreciation of the dollar against most currencies, but the impact is especially apparent in Europe, raising the aggregate wealth loss to $10.9 trillion, by far the largest contribution to the total global loss of $12.3 trillion. Asia-Pacific (including China and India) was the other big regional loser, shedding $1.4 trillion,” said the report.
Credit Suisse said global household wealth will rise by 50% in the next five years to $330 trillion, while the number of millionaires worldwide may increase by about 18 million by 2017 from 46 million now. China is expected to add $18 trillion of household wealth in the next five years and surpass Japan as the second wealthiest country in the world, though the US will likely remain on top of the wealth league with $89 trillion by 2017.