Private wealth 'to grow at slower pace'

A sign sits atop Credit Suisse Group AG's headquarters in Zurich, Switzerland.
A sign sits atop Credit Suisse Group AG's headquarters in Zurich, Switzerland. PHOTO: BLOOMBERG

Credit Suisse cuts growth forecast for next five years amid slowdown in world economy

The global economic slowdown is expected to crimp the growth of private wealth over the next five years, Credit Suisse Group AG has said.

Private wealth is now expected to grow 6.6 per cent a year to US$345 trillion (S$483 trillion) by June 2020, the Zurich-based bank said in its 6th annual wealth report yesterday. That compares with last year's forecast of a 7.1 per cent annual rise to US$369 trillion by 2019.

"The global economic outlook is weaker than previously expected," Credit Suisse said. "This leads us to revise our projections downwards."

Mr Michael O'Sullivan, the bank's chief investment officer, private banking and wealth management, said: "We expect the global economy to accelerate slightly, with the Chinese economy stabilising as it makes a transition towards consumption and services."

Private wealth fell 4.7 per cent in the 12 months ended June 30 to US$250.1 trillion, the first decline since the global financial crisis. Net worth valued in US dollars dropped in almost every region except China and North America, as the US dollar rose against most currencies.

Private wealth fell 4.7 per cent in the 12 months through June 30 to US$250.1 trillion, the first decline since the global financial crisis. Net worth valued in US dollars dropped in almost every region except China and North America, as the US dollar rose against most currencies.

In Singapore, forex fluctuations trimmed total household wealth by 5.8 per cent to US$1 trillion. Excluding the fluctuations, that figure would have grown 1.8 per cent.

Average wealth here has fallen 7.2 per cent from the middle of last year to US$269,400. "Household wealth per adult in Singapore grew strongly up to 2012, but has since declined in US dollar terms due to adverse exchange rate movements last year. The Singdollar is down about 7 per cent against the US dollar year on year," said the report.

"According to our estimates, real assets, which comprise real estate primarily, are down 2 per cent due to lower real estate prices, which have fallen about 4 per cent."

Singapore ranks eighth in terms of personal wealth per adult, ahead of Hong Kong (20th), where wealth grew at an average annual 2.7 per cent between 2000 and 2015 against Singapore's 6.2 per cent.

Switzerland kept its top spot, with average wealth of US$567,100 per person.

The number of millionaires here was 142,000 in the middle of this year, a drop of nearly 9 per cent from last year. But this number is projected to jump 50 per cent in the next five years to 212,000 in 2020.

Singapore has 752 ultra-high-net- worth individuals, with more than US$50 million net wealth, up from 743 a year ago, the bank said.

The average debt of US$54,600 is moderate for a high-wealth country, at just 17 per cent of total assets.

Singapore has a high proportion of middle-class adults (62 per cent), owning US$334 billion of wealth, 31 per cent of the country's total.

Its distribution of wealth shows a moderate level of inequality. About 90 per cent of the population has wealth above US$10,000, 46.5 per cent has between US$100,000 and US$1 million, and 3.5 per cent has wealth above US$1 million.

A version of this article appeared in the print edition of The Straits Times on October 14, 2015, with the headline 'Private wealth 'to grow at slower pace''. Print Edition | Subscribe