A new report published by financial services firm, Allianz, shows that global financial assets climbed by 4.9% in 2015, just a fraction above the growth rate of economic activity.
The seventh edition of its “Global Wealth Report”, which puts the asset and debt situation of households in 53 countries under the microscope, noted that in the three previous years, financial assets grew at twice that pace, with an average rate of 9%.
“For savers, making the right investment decisions is getting harder and harder”, said Michael Heise, chief economist at Allianz.
“Obviously, extreme monetary policy is losing its impact even on asset prices. As a consequence, an important driver of asset growth no longer exists. At the same time, interest rates continue their remorseless slide, deep into negative territory. Savers face a real dilemma.”
The report noted that South Africa ranks 39th out of 53 countries by net and gross per capita.
South Africa has €434 billion in gross financial assets, a 3.7% increase from 2015.
The country’s gross per capita income is at €7,961 (R122,000), while net financial assets amounts to €5,894 (R90,526) per capita.
The global average is €23,300 (R358,000), according to the report.
Allianz calculates that South Africa’s GDP per capita is at €4,351 (R66,800).
On a country basis, Switzerland is the richest country when it comes to net financial assets per capita. In 2015, the average resident boasted €170,589 (R2.62 million) in financial assets.
The US is second with €160,949 (R2.47 million) per capita, and the UK third, with €95,600 (R1.47 million).
At the other end of the scale, Kazakhstan ranks last, with a net average wealth of €613 (R9,420), with Indonesia and the Ukraine also scoring poorly.
Middle class wealth
Allianz said that since 2000, almost 600 million people have achieved promotion to the middle wealth class.
“The global middle wealth class has grown considerably as a result: in recent years, the number of people has more than doubled to over one billion people; the share of the overall population has climbed from 10% to around 20%,” it said.
The proportion of global assets held by this wealth class has also grown significantly, rising to a good 18% at the end of 2015, almost three times the figure at the start of the millennium.
“So the global middle class has not only been getting bigger in terms of the number of people it encompasses; it has also been getting increasingly richer,” Allianz said.
It said that at the end of 2015, around 540 million people across the globe could count themselves among the high wealth class, a good 100 million or 25% more than in 2000.
The emergence of a truly global middle class in such a short time span is one of the most important developments for the world economy. To date, this process is being driven primarily by China.”
“If in future more populous countries such as India manage to unleash their potential in full, this success story can continue for the foreseeable future,” said Heise.