Not only has the coronavirus pandemic significantly crippled many economies around the world, but impacts to individual wealth have also been detrimental – especially in the US and Latin America.
According to the Global Wealth Report released by Credit Suisse, the coronavirus pandemic has caused individual wealth to decline across the globe, with some countries being hit harder than others. With respect to last year, global wealth increased by more than $36.3 trillion, meanwhile wealth per capita rose by 8.5% compared to 2018. This positive increase in wealth ultimately helped cushion the blow from the pandemic, in addition to the copious stimulus spending by governments and central banks.
The actions of governments and their respective central banks around the world shielded the worst of the coronavirus pandemic fallout back in the spring, causing global wealth to rebound by $1 trillion between the first quarter and second quarter of 2020. According to Credit Suisse economist Anthony Shorrocks, it is surprising that individual wealth was able to rebound relatively unscathed compared to the severity of the pandemic.
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Since the beginning of the year, global wealth per adult declined from an average of $77,309 to $76,984. This means that millennials, along with the forthcoming post-COVID generation will be subject to diminished globalization and economic activity, in addition to subdued travel. The report found that India and China were the two only countries that saw increases in individual wealth in the first half of 2020, with growth of 1.6% and 4.4% respectively.
However, the gains to individual wealth will not be uniform across the world. According to Credit Suisse, the main outlier is the US economy, which continues to be decimated by soaring infection rates and the government’s inability to control the virus’s spread. As a result, the report forecasts wealth per adult to fall by 5% in 2020, and remain subdued until at least the following year. However, Latin America is projected to suffer the worst of the wealth declines, with a staggering 13% plunge in household wealth amid currency devaluations and severe losses in GDP levels.
Information for this briefing was found via the Global Wealth Report. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
