The 12th Global Wealth Report by global financial services group Allianz (see video here), which assesses the asset and debt situation of households in nearly 60 countries, shows that the wealth of South African households in financial assets has increased. increased by 5% in 2020.
Allianz reports that the main driver was bank deposits, which rose 11.3%, the fastest increase in six years. In contrast, insurance and pension fund assets, which are by far the most popular asset class in South Africa, accounting for more than half of all financial assets, increased by only 2.3 %, one of the smallest increases in recent years. Market-related investments posted a strong performance, up 6.1% from 2019.
Debt growth was 4.3%, compared to an average increase of almost 6% over the previous three years.
Allianz notes that when economic output contracted in 2020, the debt ratio (household debt as a percentage of GDP) jumped to 48%, a level well above other emerging regions such as Latin America. (32%) or Eastern Europe (26%) – but well below Asia (excluding Japan) where the average debt ratio is 61%.
Finally, net financial assets increased by 5.2%. With a net financial asset per capita of 108,000 rand (6,400 euros), South Africa remains in 39th place in the ranking of the richest countries. South Africa ranks ahead of Russia (42) and Brazil (43), but below China (34). As many European countries like Italy, France, Belgium and the UK have dropped quite dramatically in the rankings since 2000, the top 10 is different today than in 2000: it is more about of a Scandinavian-Asian affair – but with the United States and Switzerland still reigns supreme.