Global growth in private wealth is now being driven by the “new world” of rapidly developing economies, according to The Boston Consulting Group’s annual report on global wealth.
Nevertheless, despite an impressive 10 per cent jump in private financial wealth in the Asia-Pacific region (excluding Japan), Latin America, Eastern Europe and the Middle East and Africa, total global wealth grew only 1.9 per cent in 2011 to reach a total of $123 trillion. The annual increase marked a dramatic slowdown from 2010 and 2009, when global wealth grew by 9.6 and 6.8 per cent, respectively.
Economic uncertainty and struggling equity markets in major developed economies were the primary reasons for last year’s slump, according to the BCG report, The Battle to Regain Strength: Global Wealth 2012.
Wealth creation has become “a two speed world,” said Monish Kumar, senior partner and global leader of asset and wealth management at BCG, speaking at a press briefing in New York yesterday. “More than 100 per cent of growth was driven by the developing world, while the developed world pretty much stayed where it was.”
Indeed, private wealth in the “old world” of North America, Western Europe and Japan declined by 1 per cent last year, according to the report.
BCG expects the two-track trend to continue for the rest of the decade, and predicts that private wealth in the Asia-Pacific region will exceed $40 trillion by 2016, overtaking Western Europe.