http://www.businesstimes.com.sg/arch...chest-20121011
Published October 11, 2012
Wealth down, but S'poreans are the world's eighth richest
S'pore's total wealth at US$1t in 2012; 249k millionaires in 5 yrs: Credit Suisse
By Siow Li Sen
YET another report has appeared to say that Singaporeans are among the wealthiest people on the planet. And in five years' time, the number of millionaires here will surge some 60 per cent to 249,000.
But it's not all good news. It seems that Singapore's total wealth in 2012 fell by US$25 billion or 2.5 per cent to US$1 trillion, making it the third richest Asian country and eighth globally, according to the latest wealth report from Credit Suisse.
Last year, Singapore ranked second behind Australia and was fifth richest globally.
Singapore's total wealth declined by US$25 billion or 2.5 per cent to US$1 trillion from mid-2011 to mid-2012, mainly due to the reduction in household financial assets measured in US dollars.
The report, in its third year, defines household wealth as all assets - physical or property and financial minus debt. During the period under review, local stockmarket capitalisation was down 8.2 per cent and the Sing dollar fell 4.3 per cent against the US dollar but house prices rose 2 per cent.
Market volatility saw a 9 per cent fall in the number of millionaires here to 156,000 from 165,000.
But rest assured that the volatility is only a blip in Singapore's march to even greater wealth and Credit Suisse projects that in five years' time, Singapore will have 249,000 millionaires or 60 per cent more.
Chew Soon Gek, Credit Suisse head of strategy and economic research, Private Banking Asia Pacific, said the report forecasts positive and continuing wealth growth for Singapore over the next five years.
Forecasts of the two key components of financial and non-financial wealth are made using gross domestic product and inflation forecasts from the International Monetary Fund's latest world economic database, she said.
The source of the Singapore household balance sheet and financial balance sheet data in the report is the Singapore Department of Statistics.
Other models are used to compute financial and non-financial wealth, she said.
"Singapore is a well- managed economy with high savings rate, and we are confident that the conduct of economic and exchange rate policy would sustain medium-term economic growth," said Ms Chew.
Over the last 12 years, despite market downturns and the global financial crisis, average wealth per adult in Singapore has grown by 7.1 per cent per annum, outperforming the global and Asia Pacific average of 5.8 per cent and 6.9 per cent respectively, she noted.
In the last 12 years, household wealth per adult in Singapore more than doubled (rose 129 per cent) to US$258,117 from US$112,800 in 2000.
Household total assets in Singapore are divided roughly equally into financial assets (48 per cent) and non-financial assets or property (52 per cent), reflecting the government's strong encouragement for both savings and home ownership.
"Despite a drop of 4 per cent in the past year, its average wealth per adult places Singapore as the third wealthiest nation in Asia Pacific and eighth globally, alongside many smaller dynamic economies including Switzerland, Norway, Luxembourg and Sweden, as well as Australia and G7 members USA, Japan, France and the UK," said Credit Suisse.
The report said the average household debt is US$45,600. While this is moderate for a high income country, at 18 per cent of net wealth which is also the global average, it is much higher than the Asia Pacific average of 13 per cent.
Asian countries with less developed financial institutions and credit markets like Indonesia (2.4 per cent), the Philippines (2.6 per cent), China (3.1 per cent) and India (3.8 per cent) recorded very low household debt as a percentage of net wealth.
"Looking ahead, household debt is expected to see faster growth in these countries than in the more developed economies in Asia Pacific and the world as credit markets and financial institutions mature," it said.
The distribution of wealth in Singapore shows moderate inequality. More than 80 per cent of the population have assets above US$10,000 and 48 per cent of the population have assets above US$100,000.
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