Malaysians RM116 billion poorer this year

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KUALA LUMPUR — Households in the country jointly lost US$26 billion (RM116 billion) or approximately five per cent of their total wealth this year, according to the Credit Suisse Research Institute (CSRI).

In the Global Wealth Report that annually charts wealth generation worldwide, the regression meant each of the country’s 19 million adults were now an average of US$1,894 poorer than they had been last year, with the current share of wealth per adult dropping to US$24,429 (RM106,000).

At the same time, the debt of each Malaysian adult also rose from US$7,054 (RM31,000) last year to US$7,462 (RM33,000) this year.

The regression is especially marked considering Malaysia had consistently been in the top 10 countries with the fastest growing wealth between 2000 and 2015, with an aggregated expansion of 4.8 per cent.

Also of concern is that the decline comes amid the country’s push to break out of the middle-income trap and into developed nation status. This was noted in the report that categorised Malaysia as dipping under the minimum to qualify as a country of “intermediate wealth”.

“In recent years, Malaysia and Poland have hovered near the US$25,000 (RM111,000) lower limit, but both have now fallen below this threshold according to our calculations,” the report stated.

Malaysia’s income level now puts it among countries with “frontier wealth” such as neighbours Thailand and Vietnam.

Not all Malaysians lost wealth, however, as the report found that the country gained around 4,000 new millionaires since last year despite the overall decline, possibly suggesting that most of the bleeding was towards the lower end of the income scale.

Regionally, Malaysia’s regression also takes place against the backdrop of growing wealth in the Asia-Pacific region, which the CSRI reported as 8.3 per cent higher on average. Average wealth per adult in the Asia-Pacific is US$46,325 (RM204,000).

Singaporeans contributed to the gain with their average rise of US$4,000 (RM7,000) in wealth per adult, bringing their individual share of wealth to US$277,000 (RM1.2 million), or the seventh highest in the world.

Overall, Japan was the country that grew its wealth the most this year, with a 19 per cent increase that the CSRI noted was the same amount of appreciation registered by the Japanese yen.

The biggest loser was Argentina that saw 27 per cent of its wealth, or US$175 billion (RM779 billion), wiped out due to adverse exchange rate movements.

The CSRI has prepared the Global Wealth Report annually since 2009.
— The Malay Mail Online