India and China Managed Economic Growth Even Amid COVID: Credit Suisse Report

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The COVID-19 pandemic has led to over a million deaths globally and also caused a decline in individual wealth all over. However, the household wealth in India and China not only largely held up but even increased, according to the Credit Suisse Group AG’s 2020 Global Wealth Report released.

“Given the damage inflicted by COVID-19 on the global economy, it seems remarkable that household wealth has emerged relatively unscathed,” said economist Anthony Shorrocks, one of the report’s authors, adding as a caveat that the findings are based on provisional household balance sheets for the second quarter issued by a few countries.

The “main outlier” is North America, the report says, where the economy is hobbled by the “continued weakness due to the high prevalence of Covid-19” in the US. The region’s wealth per adult is projected to drop 5% this year, and remain near that level in 2021.

Only China and India saw gains in household wealth in the first half of the year, growing by 4.4% and 1.6%, respectively. Latin America suffered the most, with a 13% plunge, as currency devaluations aggravated losses in gross domestic product.

Wealth per adult slipped to an average $76,984 from $77,309 at the start of the year, the report found. Switzerland, the Netherlands, Taipei and Hong Kong saw gains, while Norway and the UK posted the biggest declines.

The top 1% of the world, with more than $1 million each, hold 43% of global wealth, the report concludes. Meanwhile, about 2.8 billion adults have less than $10,000, collectively owning just 1.4% of global wealth.

Female workers, millennials and minorities were hit the most by the pandemic, mainly because of their high representation in businesses, such as restaurants, hotels and retail that have been severely affected.

Millennials also suffered the repercussions of the financial crisis, and the next post-COVID generation will have to deal with reduced economic activity and globalization, as well as discouraged travel, Credit Suisse said.

“There is the promise of many more surprises to come,” Nannette Hechler-Fayd’herbe, Credit Suisse’s chief investment officer for international wealth management and global head of the economics and research unit was reported saying. “Among the major economies, China is likely to be the clear winner,” she added.

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