The coronavirus pandemic has caused misery and economic damage worldwide, but it has also been a boon to the wealthy as an estimated 5.2 million people became millionaires last year while the number of those worth at least $50 million increased by nearly a quarter.
A Credit Suisse report found that the total global wealth accumulated by households rose by nearly $28.7 trillion in 2020 as central banks flooded financial markets with cheap money, inflating asset prices.
Rising valuations of equity and residential property brought the total net worth of households — assets, including property, minus debt — to about $418.3 trillion. The increase was equivalent to a 4.1 percent rise on a flat currency basis – just below the annual average for the past two decades even as global economies struggled with the health crisis and lockdown restrictions.
“The discrepancy between what has happened to family wealth and what is happening in the broader economy cannot be more stark than ever,” the Credit Suisse report said. It found that the rich benefit most from a policy response that inflates assets, with the gap between the rich and the poor widening in most countries.
The combined wealth of individuals with net worths of at least $1 million has grown fourfold since 2000 to $191.6 trillion, while their share of global wealth has increased from about 35 percent to 46 percent.
An estimated 2.9 billion people – 55 percent of all adults – simultaneously own less than $10,000 in net assets. “Differences in wealth among adults widened in 2020 for the world as a whole and also for most countries,” said the research paper, co-authored by economists Anthony Shoroux, James Davies and Rodrigo Loberas.
The study estimated that there were $56.1 million globally at the end of 2020, an increase of 5.2 million from the previous year. About a third of the new millionaires came from the United States.
While about 90 percent of millionaires have a net worth of less than $5 million, an estimated 7 million have more than that amount. At the higher end, a net worth of 215,030 is over $50 million – up from 173,620 recorded the year before.
“This would be a very high rise in any year, but it would be particularly striking in a year of social and economic turmoil,” the authors wrote. “The nature of the policy response to the pandemic has of course had a huge impact.”
Millionaires remained uncommon in India, Indonesia, and Russia, with a rate of 1 in every thousand adults, and also relatively rare in China, at 1 in 200 people. This compares to 8 percent of the population in the United States and 15 percent in Switzerland. Credit Suisse’s methodology included housing wealth as well as investable assets.
Countries hit hard by the coronavirus were among those that recorded the largest expansion of household net wealth. The study found that the gains were greater in North America and Europe, where total wealth rose by about 10 percent.