While the world was largely battered by the crisis caused by the COVID-19 pandemic, Singapore emerged relatively unscathed.
With one of the lowest mortality rates among developed nations at just 228 deaths per million people (behind only New Zealand at 162 and Taiwan at 38, although figures are still rising), no debt incurred to support its economy (thanks to its vast financial reserves), and continued low unemployment, the city-state of Singapore has been among the top performers, if not the best, in these turbulent times.
According to Ravi Sharma, Lead Banking and Payments Analyst at data company GlobalData, while Singapore’s economy was affected by the pandemic, the country has been able to control the outbreak to a large extent. This, coupled with a rapid restart of domestic economic activities and government stimulus, led to a 7.5% growth in the value of its retail savings and investment market in 2020, driving a 5.9% increase in the affluent population during the same period.
Data and reports tracked by GlobalData’s wealth market and retail investment analysis indicate that this success is reflected not only in national statistics but also in the personal affluence of Singapore’s population.
Among the vast amount of statistical data, the company tracks the affluent population in different countries, defined as all individuals aged 20 or over, divided into two categories: the mass affluent (those with liquid assets of $50,000 to $1 million) and high-net-worth individuals (with over $1 million in liquid assets).
According to its latest findings and forecasts:
- Despite the COVID-19 pandemic, the number of affluent individuals in Singapore increased by 137,000 between 2019 and 2021.
- Their proportion in society has increased from 26.6% to 30.6%.
- Both the mass affluent population and high-net-worth individuals (HNWIs) have grown.
What Does This Data Reveal About Singapore?
Firstly, while the proportion of the affluent population has crossed the 30% mark, this was clearly aided by a 200,000 reduction in the overall population during the COVID-19 pandemic. However, despite the population outflow, the absolute number of affluent individuals has increased.
Secondly, even as the population is expected to rebound with the reopening of borders, more people are projected to join the affluent ranks–both in absolute numbers and as a percentage of society–reaching 1.7 million and 35% respectively by 2026 (equivalent to a compound annual growth rate of 3.7%, according to GlobalData’s forecast).
Finally, both the high-net-worth and mass affluent populations have increased since 2019–indicating that it wasn’t just the ultra-rich who weathered the storm well. The stock market rebound played a significant role:
Ravi Sharma of GlobalData stated that in terms of investments, the stock market was most affected by the pandemic, with the Straits Times Index (STI) failing to recover its losses in 2020. However, the market rebounded in 2021, improving investor sentiment. Consequently, the equity asset class grew by 7.1% in 2021. The strong performance of the stock market, combined with low interest rates on bank deposits, also increased the appeal of mutual funds as a savings and investment tool, as this asset class grew by 5.8% in 2021.
A Generational Leap
However, what I find most fascinating is the generational leap that will be completed by the end of the 2017–2026 decade.
In just 10 years, in a country with a population of just over 5 million, a staggering 559,000 people will have been elevated to the affluent class (a 52% increase), and another 20,000 will have joined the ranks of high-net-worth individuals (a 54% increase). The total numbers will reach 1.638 million and 57,000 respectively, accounting for about 35% of the population by 2026–meaning more than one-third of Singaporeans will each have at least $50,000 (more than the local median annual salary) in net liquid assets.
While this may not exactly be “Crazy Rich Asians” level of wealth, it does mean:
- A significant portion of society has a healthy sum of money available for further investment;
- and an increasing number of ordinary people are climbing the economic ladder into the affluent class.
And for Singapore to continue its excellent performance amidst a raging global COVID-19 pandemic is all the more admirable.
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