New York: In a sign of growing entrepreneurship and an expanding corporate sector, India created millionaires at the fastest pace in the world in 2007, according to a new report.
India added 23,000 millionaires in dollar terms last year to its 2006 total of 100,000, according to an annual Merrill Lynch Capgemini report that compiles such financial data for its wealth and asset management purposes.
"India led the world in HNWI (high net worth individuals) population growth at 22.7 percent, driven by market capitalisation growth of 118 percent and real GDP (gross domestic product) growth of 7.9 percent. Although India's real GDP growth decelerated from 9.4 percent in 2006, current levels are considered more stable and sustainable," the report said.
The number of people around the world with at least $1 million in assets passed 10 million for the first time last year, marking a 6 percent increase from the previous year. This growth, however, was lower than the 8 percent recorded from 2005 to 2006.
The millionaires’ bank accounts swelled too in 2007, the report released Tuesday said.
The combined wealth of the 10 million millionaires grew to nearly $41 trillion last year, which is 9 percent more than in 2006. That means their average wealth was more than $4 million, the highest it has ever been. Home values were not included in asset totals.
"The growth of their wealth is outpacing the growth of their population, and that's a trend that's going to continue in coming years," said Ileana Van Der Linde, a principal with Capgemini.
Besides India, two other developing economies, China and Brazil, were also growing millionaires at a high rate, albeit the US continues to lead the list. One in every three millionaires in the world lives in America while Africa, the Middle East and Latin America together account for just one in 10.
The birth of 600,000 new millionaires last year did not surprise economists. Brian Bethune, an economist with Global Insight, was quoted as saying that inflation and the expansion of the world economy accounts for the growth. Besides, the dollar is worth less now.
The report noted steady growth in world economies in the first half of 2007 before the US housing and credit crises started taking their toll in the second half. Emerging economies remained largely unaffected though.
In a time of economic slowdown, the rich are seen to shift their money to safer investments such as bonds and money-market savings accounts, taking it away from investments such as real estate, the report found.
Cash deposits and fixed-income securities accounted for 44 percent of the assets of the world's millionaires, an increase of 35 percent over 2006.
By 2012, the wealth of the world's richest is projected to reach almost $60 trillion.
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