For the first time since the 2008 crisis, the wealth of households declined globally amid political uncertainties and fears of trade wars, according to the latest Allianz Global Wealth Report. The report shows that it is not only savers in poorer countries that felt the brunt of escalating trade conflicts and rising political uncertainties. Households in advanced countries, too, had to cope with negative financial asset growth in 2018.
According to a BusinessTech article the gross financial assets of South African households declined by 3.2% in 2018, marking the first decline since the financial crisis back in 2008. The decline was triggered by a sharp fall in insurance and pensions (-2.0%) and other assets (-9.5%). Bank deposits, on the other hand, grew at a relatively healthily rate of 7.8% – but account for only 15% of all financial assets.
“Growth in liabilities accelerated to 6.9%, the fastest increase in six years. As a result, the debt ratio of households etched up to 44.3% at the end of 2018, well above the average of emerging markets of 40.3% – but still ten percentage points below the pre-crisis peak,” Allianz said.
As result of declining assets and rising liabilities, net financial assets in South Africa fell by 6.4% in 2018.
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Click here to download the detailed Allianz Global Wealth Report.
