Global Wealth: 341 Trillion Dollars by 2022
Credit Suisse Research Institute expects the world to generate 60 trillion dollars over the next five years. The overall pace of wealth creation will be relatively moderate. Unsurprisingly, emerging markets will advance more dynamically then their developed peers. In terms of wealth segments, nearly a quarter of the global population will belong to the middle class by 2022.
Since the year 2000, global wealth more than doubled. However, the global financial crisis severely altered the pace and the pattern of wealth creation observed until 2007. Evident differences divided the first decades of the new century into two distinct periods: the pre- and the post-financial crisis.
Prior to the crisis, global wealth grew at an annual pace of 9.5 percent. After recording a very sharp decline of –12.6 percent in 2008, the wealth aggregation resumed at a much more moderate rate of just 3.8 percent per year. And it doesn't seem to speed up anytime soon.
In the latest Global Wealth Report, Credit Suisse Research Institute projects that in the coming years wealth will continue to grow at a very similar pace and by 2022 the world should get richer by 60 trillion dollars.
Dynamic Emerging Markets
Wealth accumulation should differ among regions. While the annual rate of wealth increase is projected to be 3.3 percent for developed markets (slightly below the global average), the estimate for emerging economies is double that: 6.5 percent.
Between 2000 and 2017, emerging markets have increased their share of global wealth from 11 percent to 19 percent. And they are set for further growth: In the next five years they are expected to accumulate wealth twice as fast as developed markets and hold as much as 22 percent of global wealth.
The Special Case of China
The case of China between 2000 and 2017 is particularly striking: Over less than two decades its wealth increased to the same extent as US wealth increased over the course of the 70 years from 1916. Although such pace of growth is not likely to be kept, by 2022 the People's Republic is projected to add a total of USD 10 trillion to the stock of global wealth. As a result, China's share in global wealth will grow to 11 percent, half of what all emerging economies will hold in 2022.
Looking from the wealth segments perspectives, China is also expected to do well in the middle and upper wealth segments. The number of millionaires should grow there by 41 percent, taking the country to the third place in the ranking of countries with the highest number of millionaires, after the US and Japan. The global middle class will also expand thanks to China's faster wealth creation. Nearly half of the new middle-class citizens will originate from there.
Expanding Middle Class
All wealth segments apart from the least affluent group are expected to expand in the coming years.
According to the researchers, a quarter of global population will rank as middle class by 2022. The group which is classified as holding net worth between 10,000 dollars and 100,000 dollars, is projected to grow by nearly 230 million adults, exceeding 1.2 billion adults in the next five years. As stated above, the growth will be led by China.
The millionaire segment is also projected to expand, however it will be adversely affected by the lower world wealth growth. Again, the most significant increase will be seen in emerging economies.
The least affluent group, owning less than 10,000 dollars, will continue to be the largest wealth segment in terms of adult population. However, researchers estimate it will shrink from 70 percent of the global adult population today to 66 percent in 2022.