Wealth of the world to double by 2020

Global financial assets will increase by some 90% by 2020. In 2010, these totalled $198.1 trln and a decade later, will reach $371 trln. This is the forecast under the baseline scenario projecting market growth of McKinsey Global Institute. In case of recovery at two speeds, with emerging economies progressing much faster than the developed countries, the world’s wealth will increase from $198 trln to $338 trln or by 71%. In the most optimistic scenario, it will jump by nearly 98% to $391.5 trln, experts forecast. But in all three cases, the share of Western Europe and of the U.S. will decrease: from $27 trln in 2010 to between $24 trln and $22 trln for the Old Continent and from $29 trln to between $27-24 trln for the U.S. depending on the situation.

The data of the McKinsey Global Institute is confirmed by the report of consulting company Deloitte, according to which households’ wealth will increase by 119% until 2020 to a total of $202 trln. Developing countries will register some 260% growth, compared to a much more modest increase of 107% in industrialised economies.

In 2010, investors from developed markets managed 79% of the world’s financial wealth, or $157 trln. However, cash flows to developing countries will increase, according to the estimates of McKinsey Global Institute. Emerging economies account for 21% of the global wealth but their share is expected to increase by 36% from $114 trln to $141 trln until 2020. China’s financial assets will reach $65 trln and India’s - $8.6 trln. However, a distinguishing feature of these countries is that private investors there prefer to keep their money in bank deposits rather than in stocks. Although, Bulgaria does not belong to the group of emerging economies and is not in the report of McKinsey Global Institute, investment attitudes in our country are the same.

Only $30.7 trln of the world’s total financial wealth or 15% was held in banks in 2010. Some 14% or $28.3 trln was kept in pension funds and around 12% or $23 trln was managed by insurers. Households worldwide hold about 43% or $85 trln of the global financial assets and institutional investors - $28.3 trln or one-seventh. Central banks manage only 6% of the world’s assets, or $12 trln. The same share is in the hands of corporations.

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