Covid-19: Global pvt wealth takes a hit; India sees 20% dip in Jan-March

India sees 20 per cent drop in total wealth in January-March 2020 period; fares worse than global drop of 15 per cent

Private wealth growth rates have turned out to be negative for all major economies in the January-March quarter of 2020. Emerging economies, including India, faced the brunt of the meltdown, with total wealth growth rate ranging between (-) 14 per cent to (-) 26 per cent in the first quarter of 2020, estimates a research report by New World Wealth.
 

In India, the drop was fueled by local currency depreciation from around Rs 71 per US dollar to Rs 75 a US dollar during the quarter, the report said. The loss in local stock market - the BSE index down by 31 per cent in local currency terms during the first quarter of 2020 - was the other major reason for the erosion in value of private wealth in the country, the report added.

“Apart from the human cost, the coronavirus has also had a severe economic impact - our estimates show that global private wealth levels have dropped by around 15 per cent in the 1Q of 2020 (in US dollar terms),” the report noted.

 

 

This drop has been driven by declining global stock market returns, even as most major currencies weakened against the US Dollar, the report added.
 

“This has negatively impacted on the US Dollar based wealth of most people globally, especially those living in emerging markets,” the report said.
 

‘Global private wealth’ refers to the wealth held by all private individuals globally. It includes all their assets (property, cash, equities, business interests) less any liabilities.
 

The report also noted that some countries have handled the outbreak better than others, which may impact on their ability to recover economically in the second half of the year. Countries that appear to have handled the crisis best include Australia and South Korea.