Report: India to become world's 11th wealthiest nation by 2022
What's the story
According to a report by management consultancy firm Boston Consulting Group (BCG), India is set to become the world's 11th wealthiest nation by 2022, in terms of personal wealth, ahead of prosperous countries like Switzerland, The Netherlands, Taiwan and Singapore. The report notes that personal wealth in India would grow to $5 trillion from the current $3 trillion by 2022. Here are the details.
Personal wealth
India's personal financial wealth is growing, and it's growing fast
The report observes that India's personal financial wealth has grown at a compounded annual growth rate (CAGR) of 12% since 2012, and the growth rate is expected to be 13% between 2018 and 2022. Notably, this makes India the only nation in the world after China to have a double digit CAGR for personal financial wealth.
Data
The BCG report's predictions about US and China
The US will still retain the top position, with its personal wealth growing to $100 trillion by 2022 from the current $80 trillion. China's personal wealth, on the other hand, is expected to double touch $43 trillion from the current $21 trillion by 2022.
Individuals
India has an increasing number of wealthy individuals
Delving into details, the report notes that India has an increasing number of increasingly wealthy individuals. It points out that India currently has over 320,000 people with wealth up to $1mn, 87,000 high net worth individuals (HNWI) with wealth in the range of $1mn and $20mn, and around 4,000 ultra high net worth individuals (UHNWI) with personal fortunes valued above $20mn.
Re-investment
Vast opportunities await wealth managers
The report also noted that this vast increase in personal wealth would provide massive opportunities for wealth managers. According to BCG, nearly 70% of India's personal financial wealth would be available for re-investment by wealth managers and wealth management firms by 2022, up from 67% last year. The re-investable wealth would be in the for of listed equity, bonds, investment funds, currency, deposits, etc.
Opportunity
Indian banks aren't doing enough to capitalize on the opportunity
Yet, despite this opportunity, BCG notes that Indian banks aren't doing enough to capitalize on it. According to Anna Zakrzewski, partner and director, BCG Zurich, Indian banks have access to a ton of data in terms of behaviour, investments, life cycles, and more, but currently, they only use "just 25%-30%" of this data. If this data can be leveraged, a lot can be gained.