SINGAPORE (BLOOMBERG) - Singapore’s number of millionaires could increase by more than 60 per cent from 2020 to 2025, according to Credit Suisse Group, part of a surge in millionaires expected in Asia as financial capitals emerge from the Covid-19 pandemic.
Singapore may have 437,000 millionaires by 2025 compared with 270,000 in 2020, according to the bank’s 2021 Global Wealth Report. That 62 per cent pace would be faster than Hong Kong’s estimated 60 per cent for the same period, but slower than the growth forecast in mainland China, India, Australia, South Korea and Taiwan.
Singapore’s millionaire density – or percentage of millionaires in the total population – was 5.5 per cent in 2020, the second-highest in Asia after Hong Kong’s 8.3 per cent, the report said.
The Republic’s Gini coefficient – a more broad-based measure of wealth inequality – was at 78.3 in 2020, much higher than Japan’s 64.4, South Korea’s 67.6 and Taiwan’s 70.8.
The wealth share of the top 1 per cent in Singapore was almost 34 per cent at the end of 2020, compared with 18 per cent in Japan, 24 per cent in South Korea and 28 per cent in Taiwan.
In a small country like Singapore, higher wealth inequality can result from an unrepresentative cluster of very high net-worth individuals, the report said.
Globally, Singapore ranked 11th in terms of millionaire density, with about 1,361 ultra-high-net-worth adults with net worth exceeding US$50 million (S$67 million) in 2020.
Total wealth in Singapore grew to US$1.6 trillion last year, up from US$1.5 trillion in 2019.
Even in the midst of a pandemic, the world gained 5.2 million millionaires last year as the rich cashed in on surging stock and house prices.
The report highlighted the contrasting fortunes at the top and the bottom, as those on lower earnings suffered job losses and a drop in income due to the pandemic’s economic fallout.
Total global wealth grew by 7.4 per cent to US$418 trillion last year, and wealth per adult rose by 6 per cent to reach another record high of US$79,952. Widespread depreciation of the US dollar accounted for 3.3 percentage points of the growth. If exchange rates had remained the same as in 2019, total wealth would have grown by 4.1 per cent, and wealth per adult by 2.7 per cent.
The pandemic had a profound short-term impact on global markets in the first quarter of 2020. The report estimated that US$17.5 trillion was lost from total global household wealth between January and March 2020, equivalent to a fall of 4.4 per cent, but this was largely reversed by the end of June last year.
In the second half of 2020 share prices rallied, reaching record levels by the end of the year. Housing markets also benefited from the prevailing optimism as house prices rose at rates not seen for many years. The net result was that US$28.7 trillion was added to global household wealth during the year.
Overall, the Asia-Pacific region housed 15.6 million millionaires in 2020 and this number is expected to increase 71 per cent to about 26.7 million in 2025.
• With additional information from The Straits Times