International

India may become 4th wealthiest nation by 2027; private wealth projected to shoot up 200%

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May 21: The private wealth of Indians shot up 25 per cent between 2016 and 2017, taking the country to the sixth spot among the world top 10 wealthiest countries - one rank higher than in 2016.

If you think that's impressive, consider this: Between 2017 and 2027, India's wealth is projected to grow by a whopping 200 per cent, the fastest rate among the wealthiest nations. In the bargain, the AfrAsia Bank Global Wealth Migration Review 2018 sees India's wealth ballooning from $8,230 billion to $24,691 billion within a decade to make it the fourth wealthiest nation. The country has already posted a 160 per cent increase in private wealth in the past decade.

According to the report, the United States is currently the wealthiest country in the world with a total wealth of $62,584 billion, followed by China ($24,803 billion) and Japan ($19,522 billion). And a decade on, they will continue to rule the roost, but the wealth will multiply far slower than in India. Total wealth in the report refers to the private wealth held by all the individuals living in each country, including all their assets (property, cash, equities, business interests) less any liabilities. But government funds have been excluded.

Globally, the total private wealth held worldwide amounts to around $215 trillion and there are around 15.2 million high net worth individuals (HNWIs) in the world, each with net assets of $1 million or more. India is home to 330,400 HNWIs and 20,730 multi-millionaires (individuals with $10 million or more in net assets). In fact, it ranks seven out of the top 10 countries with the most multi-millionaires.

India fares even   better when it comes to producing billionaires, individuals with $1 billion or more in net assets. India is home to 119 billionaires, the highest in the world after the US (737 billionaires) and China (249). Things are only likely to accelerate here on, if the country's expanding unicorn club is anything to go by.

According to AfrAsia Bank, a large number of entrepreneurs is not the only factor that will fuel wealth multiplication in India. A good educational system and a robust outlook for IT, business process outsourcing, real estate, healthcare and media sectors are expected to play a significant role, too.

The reports added that the top 10 cities to look out for in the coming decade are Colombo, Pune, Hyderabad, Bangalore, Mumbai - already the world 12th wealthiest city  with total wealth pegged at $950 billion - Delhi, Kolkata, Ho Chi Minh City (Vietnam), Hangzhou (China) and Port Louis (Mauritius). Noted how India hogs the list?

"The big 7 wealth markets in Asia (also known as the "Asia7") are all expected to perform well in terms of wealth growth over the next 10 years [see table]. We expect co-operation and trade between these 7 countries to accelerate going forward, allowing them to surpass Europe to become the most powerful alliance of countries in the world," said the report.

But the report also put the spotlight on inequality spawned by the massive wealth creation worldwide. In India, HNWIs account for 48 per cent of the country's wealth. "If HNWIs control over 40 per cent of a country's wealth then there is very little space for a meaningful middle class. Ideally the ratio should be less than 30 per cent," said the report. The most unequal countries in the world are Saudi Arabia (HNWIs holding 60 per cent of the country's wealth), Russia (58 per cent), Nigeria (56 per cent), Brazil (53 per cent) and Turkey (52 per cent). Even China fares better than India in this context with its HNWIs accounting for 40 per cent of its wealth. In contrast, Japan (23 per cent) is the most equal country in the world.

Other countries in the top 10 wealthiest list currently includes the UK ($9,919 billion), Germany ($9,660 billion), Australia ($6,142 billion), Canada ($6,393 billion), France ($6,649 billion) and Italy ($4,276 billion). Over the next 10 years, Australia is expected to overtake Canada and gain significant ground on Germany and the UK.

Global wealth is expected to rise by 50 per cent over the next decade, reaching $321 trillion by 2027. Clearly, Generation Z - those born after 1995 - is in for a really good ride.  

May 21, 2018 05:22 PM