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The 12th edition of Credit Suisse's global wealth report estimates that the average net wealth per adult worldwide surged 7.4 per cent in 2020.

ARND WIEGMANN/Reuters

Crisis? What crisis? The pandemic eviscerated the global economy last year, but it also sent household wealth soaring, according to the Credit Suisse Global Wealth Report.

The 12th edition of the much-quoted survey, published Tuesday, estimates that average net wealth per adult worldwide surged 7.4 per cent in 2020. The affluence-boosting effects of the pandemic were particularly remarkable in Canada, where average wealth per adult jumped by 9.6 per cent in U.S. dollar terms.

In a great paradox, the locked-down economy spawned a profusion of new millionaires. According to Credit Suisse estimates, the number of Canadians with net worth over US$1-million jumped by nearly a quarter of a million people in 2020. The increase, from 1.436 million millionaires to 1.682 million, highlighted how three factors boosted household wealth during the pandemic.

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First, large amounts of government stimulus supported household incomes in Canada, as it did in many other countries. Second, falling interest rates boosted home prices and stock prices. Finally, savings surged because households had few ways to spend money on travel, dining and other non-essentials.

Canada was a global standout when it came to the contrast between its soaring household wealth and its imploding economic output. It, along with Belgium and Singapore, experienced roughly a 15-percentage-point gap between increased household wealth and decreased gross domestic product, according to the Credit Suisse researchers.

Was this a good thing? It certainly came at a cost. Canada recorded one of the largest percentage increases in government borrowing during the pandemic. But it was well positioned to do so because of its relatively low level of prepandemic federal debt.

Wealth per adult 2000–2020

In U.S. dollars

$600,000

U.S.

500,000

400,000

300,000

Canada

200,000

100,000

0

2000

‘02

‘04

‘06

‘08

‘10

‘12

‘14

‘16

‘18

‘20

the globe and mail, source: credit suisse

Wealth per adult 2000–2020

In U.S. dollars

$600,000

U.S.

500,000

400,000

300,000

Canada

200,000

100,000

0

2000

‘02

‘04

‘06

‘08

‘10

‘12

‘14

‘16

‘18

‘20

the globe and mail, source: credit suisse

Wealth per adult 2000–2020

In U.S. dollars

$600,000

U.S.

500,000

400,000

300,000

Canada

200,000

100,000

0

2000

‘02

‘04

‘06

‘08

‘10

‘12

‘14

‘16

‘18

‘20

the globe and mail, source: credit suisse

In theory, the boom in household wealth should help Canada avoid any long-term scars from the pandemic. But it is also worth wondering whether the pandemic boom pulled forward planned spending on things such as house buying and renovations. If so, future gains in household wealth could be harder to come by.

Composition of wealth (mean) per adult

In U.S. dollars

$600,000

Canada

U.S.

500,000

400,000

300,000

200,000

100,000

0

-100,000

Financial

Real assets

Debts

Net worth

the globe and mail, source: credit suisse

Composition of wealth (mean) per adult

In U.S. dollars

$600,000

Canada

U.S.

500,000

400,000

300,000

200,000

100,000

0

-100,000

Financial

Real assets

Debts

Net worth

the globe and mail, source: credit suisse

Composition of wealth (mean) per adult

In U.S. dollars

$600,000

Canada

U.S.

500,000

400,000

300,000

200,000

100,000

0

-100,000

Financial

Real assets

Debts

Net worth

the globe and mail, source: credit suisse

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