The growth rate of prosperity in Russia over the past two years has exceeded the world average, analysts from the Boston Consulting Group said. At the same time, most of the wealth ended up in the hands of the high-wealth Russians, whose number is growing.
Financial well-being in Russia in 2019 and 2020 grew by an average of 13%, according to a report by the Boston Consulting Group (BCG), which was reviewed by Forbes. In terms of growth rates, Russia has overtaken both the Eastern Europe region as a whole (12%) and the world average (8.3%).
Between 2020 and 2025, financial assets in Russia, according to the BCG forecast, will continue to grow by almost 6% per year. This is faster than the world average (5%), but slower than in Eastern European countries (7%). The prosperity in Russia is expected to increase from $1.6 trillion to $2.1 trillion over this period, consultants say.
Russia is also ahead of the world in terms of the share of invested assets, to which BCG experts include stocks, bonds, investment funds, cash, but not life insurance, pension plans, unquoted shares and other forms of participation in capital. According to BCG, in the period from 2015 to 2020, the share of invested assets in Russia was 80%. For comparison, in the countries of Eastern Europe for the same period it was at the level of 70-71%, on average in the world – at the level of 58-61%.
Of all asset classes, Russians prefer cash and deposits (61%), while the share of equity has declined from 27% in 2019 to 25% in 2020. On average worldwide, these two assets amounted to 28% and 38%, respectively.
However, the most significant share of wealth in Russia still belongs to the wealthiest Russians, notes BCG. The segment of high-wealth people with fortunes of $100 million in 2020 accounted for 40% of all financial assets in Russia. Experts expect that by 2025 this share will grow to 41%, and the number of high-wealth Russians will increase from 500 to 700 people.
In second place in terms of the share of wealth is the “mass” segment, to which experts classify people with a fortune of less than $ 250,000. They account for 38% of all financial assets in Russia. According to BCG, this group is the largest, with 114.6 million people last year. By 2025 their number may drop to 113 million, analysts predict.
Globally, the number of high wealthy people has grown from 60,000 in 2015 to 66,000 in 2020, the report says. The average annual growth was 9%. The consultants note that a growing segment of the younger generation (from 20 to 50 years old) is growing in this group. These people are “more willing to take risks and often seek to use their capital for socially useful purposes, in addition to receiving a stable income”, experts say.