A new report published by Credit Suisse provides insight into the make-up of the middle classes across the globe, including South Africa.
The Global Wealth Report 2015, notes that global wealth reached 250 trillion US dollars in 2015, slightly less than a year earlier, due to adverse exchange rate movements.
It found that the middle class in 2015 accounts for 14% of world adults and 32% of world wealth.
When those beyond the middle class are added, the larger group makes up 16% of the adult population and holds 92% of total wealth.
Credit Suisse defines the middle-class in terms of a wealth band instead of an income range and uses the US as the benchmark country where a middle-class adult is defined as having wealth between $50,000 and $500,000 valued at mid-2015 prices.
“Throughout the world, the size, health and resources of the middle class are seen as key factors in determining the speed and sustainability of economic development. It is often at the heart of political movements and new consumption trends, and a major source of the business people and entrepreneurs who aim to satisfy new demands,” the report said.
The size and wealth of the middle class varies greatly across countries, ranging from 3% of the adult population in India to 66% of adults in Australia.
As few as 38% of adults in the United States qualify as middle class according to Credit Suisse’s criteria.
Since the turn of the century, the number of adults in the middle class and beyond has
increased considerably, up from 524 million to 664 million.
The middle class per country (in million adults)
The report finds that middle class South Africans account for 13.7% of the adult population in the country, while middle class and above adults make up nearly 15% (14.8%).
This is in contrast to countries like Brazil, where only 8.1% of the population are middle class, Russia, with 4.1%, Egypt (5%), and India with 3%.
Australia has the highest percentage of its population, 66%, classified as middle class, followed by Singapore, and Belgium with 62%. As many as 80.3% of Australians are seen as middle class or above.
South Africa’s ratio of share of middle class wealth to share of middle class adults in 2015 is 2.8% with a 13.7% share of adults to 38.6% share of wealth.
South Africa’s adult working population is 31.4 million people. Credit Suisse puts its mean wealth per adult at US$21,402 (R287,500), the worst level since 2008, with the middle class lower-bound wealth at US$22,696 (R304,000).
The median wealth per adult is US$3,379 (R45,300) and the GDP per adult is US$14,679 (R197,000).
Switzerland has the highest middle class lower bound wealth average of $72,896, followed by Norway (US$58,176), Denmark (US$57,286), Australia (US$55,358) and the UK (US$55,123).
The Swiss also have the highest wealth per adult at US$567,122, followed by New Zealand (US$400,800), the United States (US$353,000), Norway (US$321,000) and the UK with US$320,400.
South Africa is believed to have 4.309 million middle class citizens, using Credit Suisse’s criteria. China, meanwhile has 108.8 million, followed by the US, with 91.9 million, and Japan, with 62 million.