The most recent wealth report published by Credit Suisse said Latin American household wealth declined 17.1 percent between mid-2014 and mid-2015, making it the region with the steepest wealth drop.
Latin American household wealth declined $1.5 trillion between mid-2014 and mid-2015, the Credit Suisse report said. While other regions experienced larger wealth declines -- notably Europe, with a $10.7 trillion, or 12.4 percent, decline -- the biggest percentage drop was in Latin America.
The main reason for the decline was “adverse exchange-rate movements against the U.S. dollar," the report said.
Latin America also posted the steepest proportional losses in terms of “change of wealth per adult," “change in financial assets” and “change in non-financial assets,” with declines of 18.5 percent, 18.9 percent and 15.7 percent during the year, respectively, the report said.
The total average wealth per adult in Latin America is $18,508, compared with $342,302 in North America, the world´s highest. Latin America´s wealth per adult is only higher than that of India and Africa.
Latin America accounts for 8 percent of the world´s population, but only 3 percent of total wealth, the report said.
Chile, Costa Rica and Uruguay belong to the “intermediate wealth group” (between $25,000 and $100,000 in wealth) countries, along with others, such as Saudi Arabia, Bahrain and Korea. Colombia was pushed down during the period in this category, with adverse exchange-rate movements also cited.
The “frontier wealth range” (from $5,000 to $25,000), which includes the largest area of the world and many bigger countries like Brazil, also encompasses “most of Latin America (Argentina, Bolivia, Ecuador, El Salvador, Mexico, Panama, Paraguay, Peru and Venezuela)," the report said.
For the period between 2000 and 2015, two Latin American countries, Peru and Colombia, with wealth growth rates of 4.6 percent and 4.5 percent, respectively, made it to the top-10 list of countries with the world´s fastest growth, led by China, with 5.3 percent wealth growth. One Latin American country, Argentina, was in the bottom-10 countries in the same period, with a 1.7 percent contraction, the second-worst 15-year performance after Egypt
Only 11.3 percent of Latin America´s population qualifies to be classified as middle-class or above, much lower than countries like the United States, where half qualify. About 16 percent of the total world population qualifies to be classified as middle class or above.
The wealth required to be classified as belonging to the middle class varies per region. In Brazil, for example, the threshold set by the researchers was $28,000.
The total wealth holdings of the Latin American middle class in mid-2015 was $2.6 trillion, less than half that of China and only bigger than that of India and Africa.
“In Africa, Europe and Latin America, middle-class numbers have continued to fall in the period since 2008, although the number of adults beyond the middle-class wealth range has risen recently in Latin America and Africa,” the report said.