Why has Brazil been the country that has lost the most millionaires to the epidemic
Brazil is the country that lost the most millionaires in 2020 – 108,000, according to a recent report from Credit Suisse. Despite this, the gap between the rich and the poor has widened, with the richest 1% owning almost half of the national wealth.
The study considers millionaires those with assets of more than one million US dollars (4.93 million Brazilian reals).
According to the report, titled “Global Wealth Report 2021”, the decline in the number of Brazilian millionaires is mainly due to the depreciation of the real due to the COVID-19 pandemic. In 2020, the Brazilian real depreciated by more than 20% against the dollar.
This brings the number of millionaires in Brazil to 207 million in 2020, up from 315,000 in 2019.
Other emerging economies such as India, Russia, Saudi Arabia, Chile and Mexico, among others, have also lost millionaires.
But that was an exception – in 2020, according to the report, the world acquired 5.2 million millionaires, a total of 56,084,000 people with assets of over $ 1 million. In 2019, that number was 50,873,000.
The country with the most contributors was the United States, with 1,730,000 millionaires, followed by Germany, Australia, Japan, France, United Kingdom, China, Canada, Netherlands and Italy.
Along with the increase in the number of new millionaires worldwide has been an increase in income inequality.
This is what happened in Brazil, where the gap between the rich and the poor widened.
Last year, Brazil ranked second out of the ten countries analyzed with the greatest income inequality – the richest 1% now concentrates almost half of the national wealth (49.6%). In 2019, this percentage was 46.9%.
Russia was the most unequal. There, the richest 1% own 58.2% of the national wealth.
Income inequalities increased in eight of the ten countries analyzed (Brazil, China, India, Italy, Japan, Russia, United Kingdom and United States).
France and Germany were the exceptions, both losing 0.3 percentage points.
Two elements have contributed to widening this individual wealth: the stock market recovery and the appreciation of real estate.
According to the researchers, wealth creation appears to be “completely separate” from the economic problems of the pandemic.
Anthony Shoroux, economist and author of the Global Wealth Report, said the pandemic had had a “severe short-term impact on global markets” but added that it had “largely reversed by the end of June 2020”.
In his analysis, he said, “global wealth has not only remained stable in the face of such turbulence, but has in fact increased rapidly in the second half of the year.”
According to Credit Suisse Shorrocks, if rising asset values (such as rising property values) are removed from the advanced balance sheet, “family wealth will decline globally.”
“In lower levels of wealth, where financial assets are less prevalent, wealth tends to be stable or, in many cases, regressive. “
He added: “Some fundamentals can balance out over time. For example, interest rates will start to rise again at some point, which should weaken asset prices. “
Credit Suisse reports that total global wealth increased 7.4%.
Since the start of the 21st century, the number of people with wealth between $ 10,000 and $ 100,000 (R $ 50,000 to R $ 500,000, in 23/6 trading values) has more than tripled, from 507 million in a year. 2,000 to 1.7 billion in mid-2020.
The financial institution said the increase reflected “the growing prosperity of emerging economies, especially China, and the expanding middle class in the developing world.”
“It is undeniable that the measures taken by governments and central banks to organize collective cash transfer programs to support the individuals and businesses most affected by the pandemic, and the low interest rates have succeeded in averting a crisis. global scale, ”said Nanette. Hechler. And it strikes him, Chief Investment Officer at Credit Suisse.
“Generous payments from the public sector to households mean that household disposable income is relatively stable and has even increased in some countries,” said Hechler Wieserbe of Credit Suisse.
But, according to the Bank’s assessment, another policy had a larger impact on the growth of global wealth, regardless of the disparities between income groups.
“Perhaps the central bank’s cut in interest rates had the biggest impact… This is one of the main reasons for the rise in stock and real estate prices, and it translates directly into in our family heritage assessments. “
He added, however, that all these interventions “come at a significant cost” and that “public debt to GDP has increased globally by 20 percentage points or more in many countries.”
According to Credito Suisse, the number of millionaires worldwide is expected to continue to increase. By 2025, it will reach 84 million, an increase of nearly 28 million from 2020, or 49.8%, the report predicts.
Expectations indicate that Brazil will earn 154,000 millionaires during this period, growing from the current 207,000 millionaires to 361,000, with a growth rate of 74.4%.