November 22, 2024

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(123rf)

Despite the economic fallout of COVID-19, the number of South Korean millionaires sharply increased, largely due to an overheating phenomenon in asset markets following the government’s pandemic-era stimulus measures, a report showed on June 23.

According to the “Global Wealth Report 2021,” released by Swiss banking giant Credit Suisse, the number of people with financial assets worth more than $1 million, or nearly 1.1 billion won, rose by 140,000 on-year to 1.05 million in 2020, which accounts for 2 percent of the worldwide total.

Last year, nearly 5.2 million people around the world became millionaires, raising the total to 56.1 million. They made up 1 percent of the world’s adult population for the first time, the report said.

The report defines a millionaire as a person whose financial and property assets remaining after deducting all liabilities are worth more than $1 million.

The United States posted the largest increase in millionaires in 2020 with 1.73 million, followed by Germany with 630,000, Austria with 392,000 and Japan with 390,000.

Experts attributed the rise in the number of millionaires across the globe to ample liquidity driven by governments’ monetary easing policies to cushion the economy from the impact of COVID-19, which flowed into asset markets, including stock and real estate.

“In the early days of the COVID-19 pandemic, stock markets plunged due to rising economic uncertainties, but as governments came up with swift responses, including social distancing measures and expansionary fiscal measures, financial markets showed signs of recovery and asset prices have been on the rise since June last year,” said Anthony Shorrocks, a consultant at Credit Suisse.

“Wealth creation appeared to be ‘completely detached’ from the economic woes of the pandemic.”

Climbing asset prices drove up total global wealth by 7.4 percent to $418.3 trillion last year, while median wealth per adult gained 6 percent on-year, data showed.

However, while the number of millionaires surged, poor people became poorer.

The COVID-19 pandemic is estimated to have pushed 88 million to 115 million people into extreme poverty -- a state in which a person lives on less than $1.90 a day -- last year. The figure may rise to as many as 150 million this year, depending on the severity of the economic contraction, according to World Bank.

By Choi Jae-hee (cjh@heraldcorp.com)