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With the high uncertainty in the immediate economic outlook, there seems to be little agreement on the way GDP will evolve. According to the Global wealth report 2020 by Credit Suisse, “Stock markets are likely to perform in unpredictable ways and exchange rates may be volatile as well. Household debt is a big unknown, possibly falling if consumers’ spending habits are constrained, or rising if those suffering most from the consequences of the pandemic borrow to cover their day-to-day needs.”

The report further explains that “the biggest question mark concerns the medium-term actions of governments faced by a conflict between support for economies in stress and repayment of the debt incurred in dealing with the consequences of the pandemic.”

Therefore, in this context, predicting the future path of household wealth is highly speculated. The report foresees that for the world as a whole, the average wealth for the rest of 2020 will end up below the starting level by 0.6%. As for 2021, wealth growth is forecasted to resume at a slower pace equivalent to 3.4% per annum.

The curves in Figure 11 illustrate our belief that wealth growth will resume next year in all regions, albeit at very different rates.

Source: Global Wealth Report 2020 (Credit Suisse)


“Wealth per adult in both China and India is set to grow at 9%, like rates in the recent past. Latin America will also resume at a healthy 6% pace, although this means that average wealth will still be 6% below the starting value at the end of 2021. Growth of 3% is predicted for both Europe and Asia-Pacific (excluding China and India), similar to that for the world as a whole. “– Global Wealth report 2020 – Credit Suisse. North America being the main outlier shows a continued weakness due to the high continuity od COVID-19 in the US as well as its high dependency on financial assets. Therefore, the wealth per adult is expected to be 5% below its starting value by the end of 2020 and staying around this same figure for the rest of 2021. Nevertheless, household wealth in the United States can be expected to go down in the case GDP holds up better than early predictions.

To conclude, the report shows a lower economic growth in the near future, associated with shifts in corporate and consumer behaviours will lead to lost output, sectoral changes, and redundant facilities that will hinder household wealth accumulation in the years to come. Therefore, such shocks on economies lead us to believe that household wealth will slowly recover from the COVID-19 pandemic in 2021. And it is clear that amongst the major economies of the world, China is more likely to emerge as the winner.



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