BRICS millionaires lose ground

The slowdown in economy has impacted the number of millionaires in emerging markets, especially in BRICS (acronym for Brazil, Russia, India, China and South Africa).  According to a report elaborated by Wealth-X, the number of ultra high net worth individuals (UHNWI)—with a net worth of US$ 30 million or more—diminished 3.5% this year comparing to the same period last year.

In 2011, the number of ultra high net worth individuals in the BRICS countries was 26,465 while their richness was evaluated by US$ 4,410 billion. In 2012, the number dropped down to 25,545, and the total amount was US$ 4,075 (-7.6%). The report considers a high net worth individual who has more than US$ 30 million after accounting for shares in public companies, residential and investment properties, art collection, planes, cash and other assets.

The intensification of the Eurozone crisis has especially impacted Russia within BRICS. The total wealth in Russia suffered a drop of 14.8% while the number of high net worth individuals fell 11.3%

In China, the situation was not different: the total wealth decreased 6.8% while the number of millionaires shrank 2.3%. According to Wealth-X, the number of millionaires in China was impacted by three factors: the weaker Chinese GDP; the slowdown in property market; and the stock market, which has been performing poorly this year. The crisis has especially hit export-oriented economies, where the reduction in demand has impacted growth, says Wealth-X.

A similar trend has seen in Brazil, where the number of millionaires reduced 1.8%, while the total wealth dropped 6.5%. Europe’s sovereign debt crisis has eroded demand for exports from emerging economies, reducing the demand for commodities, which affected particularly Brazil’s economy. “As the impact reverberates along the global supply chain, commodity prices are likely to be constrained, contributing to slowing economic growth in Brazil for 2012”, says the report. During the measuring period, Brazil’s “GDP saw modest growth, however that was offset by the 10% decline in equity markets and the 31% devaluation in the Brazilian Real.”

In India, the total wealth amount suffered a drop of 5,7%. According to Wealth-X, the Indian equity markets—which declined by 8% during the measuring period—caused a significant impact on the local UHNW population while the Indian Rupee fell 25%.

South Africa was the only country within BRICS that has experienced growth in number of millionaires from 2011 to 2012: the number of UHNW individuals increased 8.3%. “Wealth-X projects that South Africa’s UHNW population will expand an average of 6.2% over the next five years driven by a surge in property and equity markets. Total wealth is expected to grow 12.4% in the same period”, says the report.

Globally speaking, the ultra high net worth population stands at 187,380 with a wealth of US$ 25.8 trillion. The combined wealth attributable to this segment shrank 1.8% from a year ago. According to Wealth-X, there are 2,160 billionaires globally. This group of billionaires, representing the top 1.2% of the world’s UHNW population, controls 24% of the total fortune attributable to the ultra wealthy. On average, these billionaires are worth US$2.9 billion each.

The United States leads in terms of real growth in UHNW population numbers, with 2,250 UHNWIs joining the ranks of the ultra wealthy. The combined total wealth of the American high net worth population has expanded by US$ 265 billion, despite the weakness in global markets and the tepid recovery within the U.S.

Canada is expected to see moderate growth in terms of millionaires, going from 2.5% in 2011 to 2.1% this year.


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