Covid crisis caused wealth inequality & created millions of new millionaires – Credit Suisse

The Covid-19 pandemic saw an enormous growth in wealth disparity worldwide in 2020, the Credit Suisse Research Institute says. It reported a 5.2 million increase in the number of millionaires, to a total of 56.1 million people.

“The repercussions of the Covid-19 pandemic led to widespread rises in wealth inequality in 2020,” the annual Credit Suisse Global Wealth Report states, claiming that the rich reportedly cashed in on surging stocks.

The number of millionaires increased to 56.1 million people, who are reportedly holding 45.8% of the world’s wealth – with 1.7 million of them residing in the US.

The detailed figures show that 56.1 million individuals around the world had assets worth more than $1 million, with 2020 becoming the first year in which more than one percent of the world’s adults were “dollar millionaires.”

The report admits growth in the wealth gap stems from the “nature of the policy response” to the pandemic by governments and central banks across the world.

“The rise in wealth inequality was likely not caused by the pandemic itself, nor its direct economic impacts, but was instead a consequence of actions undertaken to mitigate its impact, primarily lower interest rates,” it highlights.

The impact of the Covid-19 pandemic on household wealth, particularly for the poorest, was reportedly worst in states where governments did not grant compensation for wages lost during the series of enforced lockdowns. In the nations where governments managed to introduce furlough schemes, the hit of job cuts and lower business income was softened.

At the same time, the wealthiest groups, who were already sitting on vast holdings of stocks and properties, were relatively unaffected by the economic shutdowns. After being crushed in the first half of 2020, share prices rebounded later in the year, thus boosting the fortunes of wealthier individuals.

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