Positive corona effects: global financial assets rise to a record level

In 2020, global private wealth will climb to an unprecedented level – and there is no end to growth in sight. The effects of the corona pandemic play a role here. But the Allianz study also shows that it is the rich who get richer.

The stock market boom and sluggish consumption made many people richer in the corona crisis year 2020. According to calculations by the insurer Allianz, the gross financial assets of private households worldwide climbed to the record sum of 200 trillion euros – an increase of 9.7 percent over the previous year. “While the economy is on a roller coaster, global financial wealth only knows one direction,” said Allianz chief economist Ludovic Subran at the presentation of the Wealth study.

According to economists, there is no end in sight to asset growth: they are forecasting seven percent growth for the current year. However, the enormous sum is still anything but evenly distributed. The richest ten percent of the world’s population – around 520 million people in the 57 countries examined – together own a good 84 percent of the total wealth, according to the information. And the one percent of the super-rich among them comes to almost 41 percent of the total – average financial assets minus debts: more than 1.2 million euros.

The prosperity gap is not a sure-fire success

According to Allianz experts, the pandemic is likely to exacerbate wealth inequality, both between rich and poor countries and within states. It is very likely that the corona crisis will burden economic growth in poorer countries for much longer than that of industrialized countries, said Patricia Pelayo Romero, co-author of the wealth study. Gradually closing the prosperity gap is no longer a sure-fire success.

The main driver of the growth in gross financial assets in the past year was the – for the most part almost by necessity – increased savings. Because of the restrictions in the pandemic, many people were unable to spend their money as usual. A number of trips were canceled, and the temporary closure of restaurants and shops slowed consumption. As a result, the sum of fresh savings had climbed by almost 80 percent to the record value of 5.2 trillion euros within a year, according to Allianz. Funds that people simply left in their bank accounts almost tripled (up 187 percent).

The wealthy benefit from Corona aid

According to official figures, the savings rate in Germany soared to a record high of 16.2 percent in 2020. In other words: For every 100 euros of disposable income, households put an average of 16 euros on the high edge. Those who have assets also benefited in the pandemic from the fact that states and central banks cushioned the corona shock with aid worth billions. As a result, the stock markets also recovered quickly. Those in Germany who discovered the stock exchange in the year of the Corona crisis participated in this. Deutsches Aktieninstitut had 12.35 million shareholders in 2020, the highest level in almost 20 years.

For the first time since 2000, last year Germans invested more fresh money in stocks and funds than in insurance, as Allianz expert Arne Holzhausen explained. It is true that the majority of savers in this country are still “not in the situation that the money is working for them”. The capital market share of financial assets is still relatively small. “But a start has been made,” said Holzhausen. The Germans gradually shook off their reputation as “equity muffle”. However, due to the high proportion of bank deposits with poor interest rates, according to Allianz calculations, Germans face a monthly loss of purchasing power of seven billion euros in view of rising inflation in 2021.

After deducting debts, the global financial assets of households in the countries examined by Allianz increased by eleven percent in 2020 to a net 153.5 trillion euros. In its twelfth Global Wealth Report, Allianz takes into account cash, bank deposits, securities and claims against insurance companies and pension funds, but not real estate.

Swiss and US Americans top the list

With a gross financial wealth of 85,370 euros per capita, Germans rank 19th in the list of the 20 richest countries, just like a year before, ahead of Italy. After deducting debts, the net figure was 61,760 euros, unchanged in 18th place. In 2020, as in previous years, the Swiss top the list with 313,260 euros per capita, ahead of the Americans (260,580 euros) and the Danes (212,570 euros). After deducting debts, the Americans were ahead with 218,470 euros, followed by the Swiss (212,050 euros) and the Danes (149,240 euros).

After all: In Germany, too, gross financial assets have recently increased steadily. According to the Bundesbank, private households in Germany owned 6.95 trillion euros at the end of last year, and three months later this record was exceeded again at 7143 billion euros. Above all, price gains on the stock exchanges are having a positive effect. Allianz’s forecast: “A similar dynamic development can be expected for 2021 – unless there is a sharp correction on the stock markets.”