Allianz Global has released its eighth Global Wealth Report which looks at the assets and liabilities of households in 53 countries, including South Africa.
South Africa is ranked at number 36 with 2016 being a politically unstable and very turbulent year globally, while the local market’s financial asset growth remained lackluster for a second year in a row at 4.7%.
Although the country’s rank was slightly higher than the year before (39th in 2016), it was well below the inflation rate of 6.6%, Allianz Global said.
Globally, financial assets grew by 7.1% to a new record high of almost €170 trillion. South Africa has €531 billion in gross financial assets, a 4.7% increase from 2016, the report said.
The United States topped the table with net financial assets per capita of €177,210, followed by Switzerland, with €175,720. Japan was third with €96,890.
Switzerland, swapped places with the US for gross financial assets per capita, with Denmrk ranked third.
South Africa’s gross financial assets per capita amounted to €9,470 (R151,000), while net financial assets amounted to €7,080 (R113,000) per capita.
Allianz calculated that South Africa’s GDP per capita has increased to €5,350 (R85,530) from €4,351 in 2016, with the average among the 53 countries at €12,490.
South Africa’s net financial assets per capita, is higher than other BRICS countries except for China, Allianz said.
However, its net financial assets of households grew by only 5.3% – one of the slowest rates among the BRICS countries, which is also below the average of advanced markets.
“The growth of liabilities slowed down to 3.2% as South African households continued to show some debt discipline. This has resulted in the debt ratio falling below 45% for the first time in ten years,” the financial services company said.
Even though the country’s households have trimmed their debt ratio by 10% over the last decade, its overall level remains elevated, and higher than the emerging market average of around 35%.
Allianz pointed out that the country’s relatively high average wealth has to be taken with a pinch of salt, as it is one of the countries where wealth is unevenly distributed.
More than 70% of all net financial assets are owned by 10% of the population at the top of the wealth distribution. Globally, only the US displays a higher share of wealth, while the global average is about 53%, it said.
Net per capita financial assets vs gross per capita financial assets: