The global wealth market declined in 2011 after two years of robust recovery, with the eurozone sovereign crisis, natural calamities, and stock market volatility taking their toll. Uncertainty about the future of the euro and the worsening of the sovereign crisis in Europe are predicted to cause continuing problems, but many emerging markets are expected to continue marching ahead.
The top 10 wealth markets, in terms of dollar millionaire holdings, are undergoing a sea change. The 10 largest markets at the end of 2011, in descending order, were the US, Japan, China, the UK, Germany, Italy, Canada, France, Brazil, and India.
Comparing this ranking to the list for 2006 highlights one key development: the entry of India into the top 10 and the exit of Spain. This brings to the fore the ongoing trend in the world order of wealth markets, whereby many of the emerging economies are overtaking their Western European counterparts.
Indeed, as demonstrated in Datamonitor's report The Global Wealth Market in 2012 (April 2012, CM00213-001), it is expected that the cumulative value of the liquid assets held by millionaires in the emerging economies Brazil, China, and India will triple from $1.5tn to $4.6tn between 2006 and 2015. India in particular will experience explosive growth, and is anticipated to jump from 12th place in 2006 to sixth place by the end of 2012, even overtaking the rapidly growing Brazilian wealth market. The top 10 list in 2015 will then see the US at number one, with China in second place, followed by Japan, the UK, Germany, India, Brazil, Italy, Canada, and France.
Most of the worst performers of the top 10 are found in Western Europe, with the Italian and French wealth markets slowly dropping towards the bottom of the list, and France set to be at the bottom of the list by the end of 2012. Meanwhile, Spain's fall from the top 10 is due to the combination of its poor performance and the explosive growth seen in India and Brazil. The collapse of Spanish real estate and the highest unemployment rate in Western Europe are taking their toll on the market, and the austerity measures recently announced by the government are further aggravating growth prospects for the already struggling sector.
Some of the mature markets have, however, proven more resilient, with the UK and the US in particular expected to perform strongly. The US will remain the largest high net worth market in the world through to 2015. Since the financial crisis in 2008, the US government, through the Internal Revenue Service, has stepped up its commitment to ensuring that super-rich individuals with undeclared offshore assets pay their fair share of taxes and repatriate these assets. This is expected to push many US super-rich to repatriate at least some of their offshore holdings, thus boosting the onshore, declared wealth market.
There are no other significant changes in the top 10 list by 2015, largely because of the large gaps between the larger and smaller markets, which have been created mainly by a combination of large populations and high economic development in the countries of the top 10, a rare mix that has made the progress achieved by Brazil and India in recent years all the more formidable.
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