Efforts to curb the coronavirus pandemic have spurred wealth inequality across nations, the latest finding that coronavirus has impoverished many of the world’s poorest while bolstering the fortunes of the well off.
The wealth share of the richest 1% in nations including the U.S., China and India rose last year, primarily due to governments slashing interest rates following the Covid-19 outbreak, according to Credit Suisse Group AG’s 2021 Global Wealth Report released Tuesday.
Getting Richer
Wealth inequality as calculated by the Gini coefficient—a more broad-based measure that captures changes at both ends of the spectrum—increased during 2020 in all of the 10 nations selected for the study except in the U.S., where it fell marginally, the report said. Global household wealth totalled $418 trillion at the end of 2020, rising 7.4% from 12 months previously, it added.
The report comes amid rising interest globally in taxing the wealthy to pay for pandemic recovery efforts after the world’s 500 richest people added $1.8 trillion to their combined net worth last year, according to the Bloomberg Billionaires Index.
U.S. President Joe Biden is seeking to increase capital-gains taxes and the amounts that wealthy heirs pay when they inherit assets. An independent U.K. commission in December called for a one-off wealth levy to raise about 260 billion pounds ($361 billion), while other nations including Argentina and Bolivia have already raised funds in the past year from measures targeting the rich.
“The repercussions of the COVID-19 pandemic led to widespread rises in wealth inequality,” the report said.
“The top wealth groups are relatively unaffected by reductions in the overall level of economic activity and, more importantly, they have also benefited from the impact of lower interest rates on share prices and house prices,” it added.
This article was provided by Bloomberg News.