Big Bank Predicts: Asia’s Financial Wealth Will Surpass the U.S. by 2025

time:2023-01-30 author:Market analysis
Big Bank Predicts: Asia’s Financial Wealth Will Surpass the U.S. by 2025

With the continuous development of financial markets, there will be more and more wealthy people in Asia. In 2008, Asia's financial wealth began to surpass that of the United States, with Japan accounting for more than half. By 2025, Asia's overall financial wealth (excluding Japan) will surpass that of the United States, with Vietnam and India seeing particularly strong growth, according to HSBC's calculations now. By 2030, the number of people with wealth above $250,000 in China, ASEAN and India will more than double, and the number of millionaires will increase from the current 10 million to 22 million. The reason given by the agency is that although the Fed's interest rate hikes have thrown global financial markets into a certain degree of chaos, in the past few years, with the deepening of financial markets and the increase in local savings, the Asian region, especially emerging markets, have become more Have the ability to take it all calmly. With a further expansion of wealth, the number of millionaires across Asia is expected to jump from around 30 million today to more than 76 million by 2030 (HSBC measures net wealth, so excluding mortgages, only including home ownership and other financial assets).

Asia's financial wealth will surpass that of the United States by 2025

According to data, the total financial wealth in Asia has tripled since 2006, reaching nearly US$140 trillion. Much of this wealth is still held in the form of bank deposits, while bond holdings are slightly higher than stocks. The respective shares of these assets have been fairly stable over time. After the 2008 global financial crisis, Asia's total financial wealth surpassed that of the United States. However, while the gap is gradually narrowing, financial wealth in the region (excluding Japan) remains low. HSBC said that given current per capita income growth trends, Asia (excluding Japan) could have more wealth than the United States by 2025; excluding Japan and China, Asia's financial wealth is about one-third that of the United States, up from 2006 This percentage is less than a quarter every year. It is worth noting that the share of financial wealth in Japan and China has reversed in the past decade, with China's total wealth now approaching 50% of the region's, while Japan's has fallen to 25%. But that doesn't mean Japan's growth has stalled: Japan's total wealth has grown by more than 50 percent since 2006, but that still dwarfs China's nearly nine-fold increase in wealth in dollar terms.

ASEAN and India are the strongest growth and the number of millionaires continues to rise

At the same time, HSBC also believes that by 2030, the total financial wealth of Vietnam and India will increase by at least 150%, while Japan Wealth growth in more advanced economies such as the United States and the United States is likely to be slower. However, given the higher initial stock of wealth in developed markets, the transfer of relative wealth shares across economies will be slower. The agency argues that faster-growing economies also tend to accumulate wealth faster, although those economies also tend to be poorer and thus start from a relatively low base. The growth of wealth in India is particularly striking. Not only will GDP grow rapidly, many Indians are approaching the "high wealth threshold". The same is true for this trend in ASEAN, although not as rapidly as India (which has more than twice the population of ASEAN). HSBC expects Vietnam, the Philippines and India to more than double the number of people holding wealth above $250,000 by 2030, with Indonesia and Malaysia not far behind. In short, the size of the "middle class" continues to expand rapidly in these economies. Against this backdrop, the rising "discretionary" share of household spending will drive demand for goods such as cosmetics, cars and computers, while also implying increased demand for more sophisticated financial services and products such as pensions and insurance. Demand keeps growing. HSBC also expects the number of people in China with a net worth of more than $250,000 to double to around 350 million by 2030, while the group in India will triple in size to nearly 60 million. In Vietnam, the number of people with $500,000 will exceed 2 million, more than the total population of Singapore. By 2035, the number of Chinese millionaires is expected to increase from around 17 million today to nearly 80 million. Elsewhere in the region, the number of millionaires is also expected to rise, particularly India, which could overtake ASEAN by 2030 and Japan by 2035, HSBC said. Apart from wealth distribution and level of economic development, population size is also the reason for the large number of millionaires in these economies. HSBC expects that Singapore, Australia and Hong Kong may have more millionaires than the US in relative terms, while South Korea and New Zealand are close to matching US levels. This article is from Wall Street News, welcome to download the APP to see more
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