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'India among top wealth creators'
Mon, 6 Jun Pre-Open

That's right. As per a study conducted by leading consulting firm, Boston Consulting Group (BCG), India is among the four fastest wealth creator countries in the world. The top four nations as per the report are US, China, UK and India. The report further stated that this creation of wealth is only expected to accelerate in the coming years. The study states that wealth in India is expected to grow at an average annual rate of 18% from 2010 to 2015. This is higher than the estimates growth rate of 14% for China.

As BCG, India and China would overtake their western counterparts in terms of creating wealth as well. The two countries have already outperformed the latter in terms of economic growth and this outperformance is expected to continue. While the west has been struggling to secure it foothold in the post crisis world, emerging economies like China and India have boomeranged their way on the path of growth.

However, in recent times both economies have seen their fire die down considerably. Higher inflation led to adoption of monetary tightening measures. These measures have led economic growth to cool off. But the cool off is in the perspective of their historic rates. Their growth is still higher than that seen in the developed world. Therefore, it does not really come as a surprise that the two countries would outrank the developed peers in terms of wealth creation as well.

Another interesting highlight of the report is the contribution of capital markets to this wealth creation process. The share of wealth held in equities increased to 35% from the 29% in 2008. And most of this growth has been contributed by the emerging economy stock markets. However, here the results are a bit skewed.

Most of the emerging markets have run up due to the huge influx of money that flooded the markets post the quantitative easing (QE-II) measures announced by US. However, US has now decided not increase its debt ceiling and create a similar flood of money again. As a result, it is questionable whether the emerging markets would again exhibit the same spectacular returns in the future as they did in the past. Therefore, in the next round of wealth creation, this proportion may decline. But nonetheless, the emerging markets would continue to do better than the developed ones. And India and China would continue creating more global wealth.

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Feb 23, 2018 09:53 AM