South African Skyline
(Photo : Futbolita)
“Who do you believe?”
This weekend in the Sunday Times, there was a depressing article about household debt. It was written on the back of a survey taken by people who intervene in these situations, and have a professional interest in “laying it on”. Against that, the Research Institute of one of the top banks in the world, Credit Suisse, tells another story all together, which Business Day published on the weekend.
You may like to remind us that racing people are eternally optimistic, and that may be so. We like to think Credit Suisse are right! This is what they had to say :
South Africa’s average household wealth has fully recovered from the global financial crisis, quadrupling from $8400 in 2000 to $34300 by mid-2011, a report by the Credit Suisse Research Institute shows.
The second annual Global Wealth Report, released this week, estimated there were now 71000 dollar millionaires in South Africa and projected that this number would triple in the next five years to 242000. South Africa was also home to 116000 members of the top 1% of households which own 38,5% of global wealth, and the country was the 17th-largest contributor to wealth growth globally.
Despite South Africa’s status as one of the world’s most unequal societies and the effect of the financial crisis on job losses, the period had coincided with considerable progress in improving the living standards of South Africa’s poorest, Frans Cronje, deputy CEO of the South African Institute of Race Relations, said yesterday.
“No doubt this improvement in living standards was almost entirely due to the transfer of wealth from those earning money to those who were not,” he said.
The roll-out of social welfare had resulted in a “remarkable” decrease in the number of absolutely poor people and South Africa had registered enormous progress in terms of service delivery, “contrary to what people believe”.
The report projects global wealth to rise 50% in the next five years to $345-trillion, equivalent to 8,4% growth a year. Wealth per adult worldwide is expected to reach $70700 in 2016, an increase of 40% over 2011 while household wealth in Africa will rise by more than 90% to $5,8-trillion in 2016.
This year Europe surpassed North America (37%) in making up 37,2% of all millionaires in the world. In Asia-Pacific, Japan ranked first with 11% or 3,1-million millionaires, followed by Australia and China, with 1-million each.
Larry Masson, a wealth manager at FNB Private Clients, said in terms of household wealth growth in the last decade the report was spot on with all levels of society seeing “exceptional growth in income”, although some from an admittedly low base. He said household wealth growth in SA would, as ever, be tied to the performance of the global economy, which was far from certain.
Extract from Business Day