Coronavirus pandemic could wipe out more global wealth than 2008 crisis
COVID-19 pandemic could erase $16 trillion in global wealth
Global wealth has soared over the past two decades, but the coronavirus pandemic and subsequent economic lockdown could wipe out trillions of dollars and hamper growth for the next five years.
That's according to a new study released by the Boston Consulting Group, which found that the worst economic catastrophe since the Great Depression may erase $16 trillion in global wealth, more than the $10 trillion eliminated by the 2008 financial crisis.
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In the span of 20 years, personal financial wealth has nearly tripled globally, surging from $80 trillion in 1999 to $226.4 trillion at the end of 2019. That was a stunning 9.6 percent increase from the previous year when it hit $207 trillion. In North America, financial wealth hit $100 trillion last year, up from $54.4 trillion in 2009 and $36.7 trillion in 1999.
"That trajectory is even more impressive in light of the many economic disruptions that have occurred during this period," the report said.
The number of millionaires globally has also tripled over the past 20 years, from 8.9 million in 1999 to more than 24 million by the end of 2019. Millionaires combined hold more than 50 percent of total financial wealth across the world. North America continues to have the largest share of millionaires at 16.4 million.
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But the coronavirus pandemic, which has dragged the global economy into the worst downturn in decades, could pose the most severe threat yet to global wealth, according to the report.
"Businesses everywhere face immense disruption," it said. "Millions of individuals are newly unemployed, and most economies have tipped into recession. While the speed of the recovery depends to a large extent on the success of public health measures, as well as on interventions from governments and central banks, the pandemic will almost certainly cause wealth to contract in the near term."
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There are three possible scenarios, the report said: a quick rebound, a slow recovery and lasting damage. In each of those respective scenarios, global wealth would lose $6 trillion, $9 trillion or $16 trillion.