There are now 63,000 super rich people with $100m or more in assets, according to recent Research. The number of these centa-millionaires has increased by 29% since 2006 and is forecast to rise even further. Amid growing economic and political tensions, manifested most clearly in the eurozone crisis and the Arab Spring uprisings, many world stock markets fell sharply.
The global economy expanded, but the pace of growth was much slower than in 2010. The US economy grew by just 1.8% and GDP in the troubled eurozone rose just 1.6%. In contrast, Asia managed to chalk up economic growth of 7.9%, although even this was down on the 9.5% achieved 12 months earlier.
The global HNWI data also indicates a shifting emphasis to the East. There are now 18,000 centa-millionaires in the region covering South-East Asia, China and Japan. This is more than North America, which has 17,000, and Western Europe with 14,000.
Table 1: The world’s largest economies
2010 GDP $tn
- US 14.12
- China 9.98
- Japan 4.33
- India 3.92
- Germany 2.91
- Russia 2.20
- Brazil 2.16
- UK 2.16
- France 2.12
- Italy 1.75
Table 2: Economic growth 2010 – 2050
Top 10 %
1 Nigeria 8.5
2 India 8.0
3 Iraq 7.7
4 Bangladesh 7.5
5 Vietnam 7.5
6 Philippines 7.3
7 Mongolia 6.9
8 Indonesia 6.8
9 Sri Lanka 6.6
10 Egypt 6.4
By 2016, the Research expects that this region will have extended its lead, with 26,000 centa-millionaires, compared with 21,000 in North America and 15,000 in Western Europe. South-East Asian deca-millionaires (those with $10m or more in assets) already outnumber those in Europe, and are expected to overtake those in the US in the coming decade.
These forecasts are influenced by the expected economic performance of countries in the Asia-Pacific region. While rapid GDP growth does not in itself guarantee a sharp rise in HNWIs, rapidly growing economies do provide key opportunities for large-scale wealth creation. Citi’s Chief Economist, agrees: “As part of the process of fast economic growth, vast wealth will be created. The distribution of that wealth will be dictated by political factors as much as the economic process itself, but there will be high returns from investment in skills and education.”
New world players
While there is little doubt that the emerging economies present the best chances for economic growth, not all countries will prosper at the same rate. Citi forecasts that the North American and Western European share of world real GDP will fall from 41% in 2010 to just 18% in 2050. Developing Asia’s share is expected to rise from 27% to 49% in 2050. China will overtake the US to become the world’s largest economy by 2020, which in turn will be overtaken by India in 2050
Citi research shows that while China and India are likely to grow rapidly over the next 40 years, there are other key countries with promising chances for growth that do not necessarily match the traditional assumptions about where future growth will emanate from.
For example, Russia and Brazil, which make up the so-called BRIC nations alongside China and India, do not make it on to Citi’s list of Global Growth Generators – or “3G” countries. Instead, Citi includes countries such as Bangladesh, Egypt, Indonesia, Iraq, Mongolia, Nigeria, Philippines, Sri Lanka and Vietnam on this list.
“All of these countries may be poor today and have decades of catch-up growth to look forward to. Some of them, including Nigeria, Mongolia, Iraq and Indonesia, also have large natural resources that we hope will be more beneficial than they so often have been in the past,”
Mexico, Turkey, Thailand and Iran are also mentioned as countries to watch, as is Brazil, although Citi says major fiscal or political adjustments would have to take place before they would be eligible to join the 3G list. While these countries can expect rapid economic growth, much of the wealth already held in developed economies will be maintained, according to Citi.