Allianz Global Wealth Report 2020: How COVID-19 has impacted the world’s wealth

The Allianz Global Wealth Report 2020 has painted a picture of contrasting fortunes in the world of wealth. According to the report, 2019 was a stellar year for global financial assets, with a remarkable growth of 9.7%. This surge marked the best performance in over 15 years, defying the modest global economic growth rate of 2.5% for the same period. The surge in financial assets was attributed to the worldwide easing of monetary policy, highlighting the interconnectedness between the real economy and the stock market. In the context of South Africa, the report positioned the country at the 38th spot in the ranking of the richest countries, with net financial assets per capita amounting to $8,385. Although South Africa demonstrated a commendable growth rate of 7.5% in 2019, it still lagged behind its emerging market counterparts such as Turkey, Brazil, and China, which saw even higher growth rates. The report underscored the disparities in wealth accumulation among nations and regions. Looking ahead, the looming question remains: How will the COVID-19 pandemic reshape the landscape of global wealth? Despite the economic upheaval caused by the pandemic, the report for the first half of 2020 revealed a surprising 1.5% growth in wealth. This unexpected growth was attributed to the strong performance of the tech sector and stock market, coupled with unprecedented government stimulus measures. The report hinted at the possibility of ending 2020 with positive wealth growth figures, underscoring the resilience of financial markets amidst the ongoing crisis. However, amidst the backdrop of growing wealth at the top, concerns about widening inequality have come to the fore. The report highlighted a worrying trend where the rich are getting richer, while the poor are stagnating. In 2019, the top 10% of the global population owned a staggering 84% of total global assets, pointing to widening income disparities. The implications of this wealth gap are profound, posing social risks and exacerbating economic inequality. In the face of these challenges, policymakers are tasked with addressing the growing inequality gap to ensure a more equitable distribution of wealth. The report called for governments to focus on preserving incomes, promoting productive investments, and creating sustainable job opportunities to drive economic growth and mitigate the widening wealth gap. As countries navigate the post-pandemic recovery phase, the need for targeted policy interventions to address inequality has never been more urgent.