Asset growth in South Africa more than halved in 2015, as the effects of accommodative monetary policy by central banks around the world put savers at a disadvantage.
International financial services provider Allianz’s latest Wealth Report shows that South Africa’s gross financial assets came in at €434 billion (R6 679 billion) during the year under review. The rate at which assets grew, fell to 3.7% from 9.3% previously, with gross.
Liabilities in South Africa grew by 5.7% in 2015. South Africa’s liabilities per capita of €2 070 is higher than the €1 610 average of other emerging markets.
“Moreover, at 48%, South Africa has one of the highest debt ratios among emerging markets; in Latin America or Eastern Europe, for example, no country can match South Africa in this regard,” Allianz said.
Out of 53 countries, Allianz ranks South Africa 39th – behind Mexico and above Slovakia – in terms of per capita financial assets. The country has gross financial assets of €7 961 per capita and net financial assets €5 894 per capita.
Switzerland takes top spot with gross financial assets of €260 804 per capita and net financial assets of €170 589 per capita, with gross and net financial assets in the world averaging at €31 068 and €23 330 on a per capita basis. Globally, gross financial asset growth increased by 4.9% in 2015 – after averaging at 9% over the preceding three years – to €155 trillion.
Of the three asset classes measured, growth in securities was highest at 6.1%, followed by bank deposits at 5.5% and insurance and pension funds of 3.3%. According to the financial services provider, the limits of accommodative monetary policy are leaving a mark on asset development worldwide.
“The development of financial assets has reached a critical juncture. Obviously, extreme monetary policy is losing its impact even on asset prices. As a consequence, an important driver for asset growth no longer exists. At the same time, interest rates continue their remorseless slide, deep into negative territory,” Allianz chief economist Michael Heise said in a statement.
He added that the outlook for savers is “not rosy”.
Despite the low interest rate environment, Allianz found that households app appear to be wary of taking debt.