Middle-class wealth up 150% in India since 2000: report
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Growth in wealth creation by the middle class in India has outpaced the global average, but lags far behind the rate of expansion in China.
In India, middle-class wealth has grown 150% since 2000. Globally, it has doubled, according to the Global Wealth Report 2015 by Credit Suisse AG. China’s middle-class wealth grew a staggering 330% in the same period.
Global middle-class wealth is estimated at $80.7 trillion, as against $44.4 trillion in 2000.
“During the same period, middle class wealth in Asia Pacific has expanded by 70% to $27.2 trillion, by 102% in Africa and by 109% in Latin America. In India it has grown by 150%, while China has experienced a significant increase of 330%,” said the report.
The report defines the middle class in terms of a wealth band instead of an income range. It uses the US as the benchmark country, where a middle class adult is defined as having wealth between $50,000 and $500,000 at mid-2015 prices, while using the International Monetary Fund series of purchasing power parity (PPP) values to derive equivalent middle-class wealth bounds in local purchasing power terms for other countries.
Going by this definition, only 3% of India’s adult population falls in the middle class wealth category. Total household wealth in India has grown at an average of 8% in domestic currency terms since 2000, the wealth report stated.
According to the report, between mid-2014 and mid-2015, household wealth rose 4.8%. In dollar terms, however, Indian household wealth fell 1% between last year and this year. Still, wealth per adult was just $4,350 in 2015.
Most of the personal wealth in India, as in other emerging markets, continues to be in the form of property. Such assets make up 86% of gross household assets. Personal debt in India remains low at just $346, the report said.
At the top of the pyramid, the number of dollar millionaires in India is expected to rise by 65% over the next five years, in line with the increase projected across the Asia-Pacific region, according to the report. By 2020, 305,000 people in India will fall in the category, compared with 185,000 currently, it said.
Globally, the number of dollar millionaires will rise by 46.2%, with the steepest increases likely to be across the Asia-Pacific (66%) and Africa (73%).
“Overall, high-income economies will still account for the bulk of new millionaires, with 14 million adults entering this category in the next five years. Millionaire net wealth is likely to rise by 8.4% annually, as more people enter this segment. Emerging markets will likely account for 9.1% of millionaire wealth in 2020, 1% above current levels,” the report said.
India now has 2,083 ultra-high-networth individuals, with more than $50 million net wealth, 3% higher than in 2014.