The eighth Allianz Global Wealth Report 2017 has ranked South Africa 36th wealthiest out of 50 countries, maintaining its ranking from last year.
The report puts the assets and liabilities of households in more than 50 countries under the microscope, including South Africa.
This performance is due to the market’s financial asset growth that remained lacklustre for a second year in a row at 4,7%. Although it was slightly higher than the year before, it was well below the inflation rate of 6,6%. Globally, 2016 was a politically unstable and very turbulent year, but private wealth shrugged it off: after a weaker 2015 (+4,7%), financial assets grew again by 7,1% to a new record high of almost EUR170-trillion.
At R111,640, South Africa’s net financial assets per capita, is higher than other BRICS countries except for China. However, South Africa’s net financial assets of households grew by only 5,3% — one of the slowest rates among the BRICS countries, which is also below the average of advanced markets.
The growth of liabilities slowed down to 3,2% as South African households continued to show some debt discipline. This has resulted in the debt ratio falling below 45% for the first time in 10 years. Even though the country’s households have trimmed their debt ratio by 10% over the last decade, its overall level remains elevated, and higher than the emerging market average of around 35%.
The country’s relatively high average wealth has to be taken with a pinch of salt, as it is one of the countries where wealth is unevenly distributed. More than 70% of all net financial
assets are owned by 10% of the population at the top of the wealth distribution. Whilst, globally, only the US displays a higher share of wealth, the global average is about 53%. At the top of the list, a change of the guard occurred in 2016, with the USA capturing the top spot from Switzerland (by a razor-thin margin). Otherwise, the list gives the usual
picture, with Scandinavian and Asian countries dominating.