Financial assets rise to 200 trillion euros
The stock market boom and slump in consumption have made many people richer in the Corona crisis year 2020. According to calculations by insurer Allianz, the gross financial assets of private households worldwide climbed to a record 200 trillion euros - an increase of 9.7 percent on the previous year. "While the economy is riding a roller coaster, global financial assets know only one direction," said Allianz chief economist Ludovic Subran at the presentation of the wealth study on Thursday. According to the economists, there is no end in sight to wealth growth: they forecast seven percent growth for the current year.
However, the huge sum is still anything but equally distributed. According to the data, the richest ten percent of the world's population - around 520 million people in the 57 countries surveyed - together own a good 84 percent of all wealth. And the one percent of the super-rich below them account for almost 41 percent of the total - average financial assets minus debts: more than 1.2 million euros.
According to Allianz experts, the pandemic is likely to exacerbate wealth inequality, both between rich and poorer countries and within countries. It is very likely that the Corona crisis will weigh on the economic growth of poorer countries for much longer than that of industrialized countries, explained Patricia Pelayo Romero, co-author of the wealth study. Gradually closing the wealth gap is no longer a foregone conclusion, she said.
The main driver of growth in gross financial assets last year was increased savings - much of it quasi-forced. This is because many people were unable to spend their money as usual due to the restrictions imposed by the pandemic. Many trips were canceled, and the temporary closure of restaurants and stores slowed consumption.
As a result, the amount of fresh savings climbed by almost 80 percent within a year to a record 5.2 trillion euros, Allianz calculated. Money that people simply left in their bank accounts almost tripled (plus 187 percent). In Germany, the savings rate soared to a record high of 16.2 percent in 2020, according to official figures. In other words, households put aside an average of just over 16 euros out of every 100 euros of disposable income.
Those with assets also benefited during the pandemic from the fact that governments and central banks cushioned the Corona shock with billions in aid. As a result, the stock markets also recovered quickly. Those in Germany who discovered the stock market in the year of the Corona crisis participated in this. In 2020, the Deutsche Aktieninstitut (DAI) counted 12.35 million shareholders, the highest level in almost 20 years.
For the first time since 2000, Germans invested more fresh money in shares and funds than in insurance last year, as Allianz expert Arne Holzhausen explained. It is true that the majority of savers in this country are still "not in the situation where the money is working for them". The capital market share of financial assets is still relatively small, he said. "But a start has been made," Holzhausen summed up. The Germans are gradually shaking off their reputation as "stock shufflers". However, because of the high proportion of low-interest bank deposits, the Germans face a monthly loss of purchasing power of seven billion euros in 2021 in view of rising inflation, according to Allianz calculations.
After deducting debts, the global financial assets of households in the countries studied by Allianz increased by eleven percent in 2020 to a net total of 153.5 trillion euros. In its Global Wealth Report, which is being presented for the twelfth time, Allianz takes into account cash, bank deposits, securities and claims against insurance companies and pension funds, but not real estate.
With gross financial assets of 85,370 euros per capita, the Germans ranked 19th ahead of Italy in the ranking of the 20 richest countries, as they did a year earlier. After deducting debts, the net figure was 61,760 euros, leaving them in 18th place. In 2020, as in previous years, the gross ranking is led by the Swiss with 313,260 euros per capita, ahead of the Americans (260,580 euros) and the Danes (212,570 euros). After deducting debts, the Americans were ahead with 218,470 euros, followed by the Swiss (212,050 euros) and the Danes (149,240 euros).
Nevertheless, gross financial assets in Germany have also been rising steadily of late. According to the Bundesbank, private households in Germany had 6.95 trillion euros at the end of last year, and three months later this record had already been surpassed again with 7,143 billion euros. Stock market gains in particular are having a positive impact. Allianz's forecast: "A similarly dynamic development can be expected for 2021 - provided there is no strong correction on the stock markets."
Photo by Ibrahim Boran