In this article, we will discuss the 20 countries with the best distribution of wealth. If you want to skip the detailed analysis, click 5 Countries with Best Distribution of Wealth.
The distribution of wealth is a comparison of wealth among various people within a society or population. In wealth distribution, the focus is more on the assets of individuals or households rather than income. Subtracting liabilities from assets equals net worth or wealth. Economic factors including growth, interest rate, inflation, and government policies play a major role in the wealth distribution of a society. The majority of the global wealth is held by high-net-worth individuals.
Global Wealth Distribution
In 2022, the world’s millionaires held nearly half of net household wealth. On January 16, Oxfam reported that the richest 1% took away almost two-thirds of all new wealth worth $42 trillion generated since 2020. In the past decade, the richest 1% have gathered nearly half of all new wealth. Decades of low interest rates led equities and real estate values to soar, and a large portion is held among the world’s wealthiest. However, in 2022, there was a sharp rise in interest rates and higher inflation led to a decrease in the fortune of the richest.
According to the Global Wealth Report 2023, the total net private wealth dropped to $454.4 trillion in 2022, plunging by $11.3 trillion from 2021. While wealth per adult fell by $3,198 to $84,718 per adult in 2022. The decline is mainly driven by the appreciation of the US dollar against foreign currencies. This marks the slowest increase of wealth at a constant exchange rate since 2008.
The region that saw the highest growth in wealth in 2022 was Latin America with a total wealth increase of $2.4 trillion, an average 6% currency appreciation against the US dollar. Countries with the largest wealth rise included Russia, Mexico, India, and Brazil. The regions that were affected the most were North America and Europe, where the total wealth plunged by $10.9 trillion. Asia Pacific’s wealth loss was about $2.1 trillion. The United States, Japan, China, Canada, and Australia had the highest wealth loss in 2022.
The brighter part of 2022 was a decrease in wealth inequalities. According to the Global Wealth Report 2023, overall wealth inequality fell in 2022 with the wealth share of the global 1% dropping to 44.5%. The global millionaires dropped by 3.5 million during 2022 to 59.4 million people. Global median wealth rose by 3% in 2022, which is a meaningful metric that reflects how the typical person is faring.
The global wealth will increase to $629 trillion by 2027, increasing by 38% over the next five years, as per the Global Wealth Report. The wealth per adult is expected to reach $110,270 in 2027. The main component for the growth of global wealth will be driven by middle-income countries. The world’s millionaires will reach 86 million while the number of ultra-high-net-worth individuals will increase to 372,000 individuals by 2027.
Businesses in High Wealth Countries
The countries with the best distribution of wealth potentially have more equal business opportunities for individuals compared to countries with higher wealth inequality. Italian multinational energy firm, Eni S.p.A. (NYSE:E), is one of the leading oil companies in the world. Eni S.p.A. (NYSE:E) has a wide range of operations across 69 countries. On November 6, Eni S.p.A. (NYSE:E) announced that it had signed an agreement with Saipem SpA (BIT:SPM) for the development of biorefining. The agreement between both the oil companies is to support the transformation of traditional refineries and the development of new Eni S.p.A. (NYSE:E) biorefineries. Eni S.p.A. (NYSE:E) is working on the decarbonization goals and this agreement is in line with that. In addition, Eni S.p.A. (NYSE:E) plans to expand its biorefining capacity from 1.65 million tons per year to over 5 million tons per year by 2030.
Japan is one of the largest economies with best distribution of wealth. Toyota Motor Corporation (NYSE:TM), one of the biggest car manufacturers in the world, is Japan’s leading automotive firm. On November 13, Toyota Motor Corporation (NYSE:TM) announced that its car brand Lexus is collaborating with Dutch solar designer Marjan van Aubel. Following the collaboration with Marjan van Aubel, the Dutch solar designer will create a sun-powered installation within the Institute of Contemporary Art, Miami (ICA Miami) sculpture garden for Lexus. Toyota Motor Corporation (NYSE:TM) is looking forward to this investment and wants a new solar design and technology pushing a carbon-neutral future. The new sustainable design is set to be revealed in early December 2023, during the Miami Art & Design Week 2023.
Umicore SA (OTC:UMICY) is a Belgium-based multinational materials technology company. Umicore SA (OTC:UMICY) is also working on renewable technology. On October 31, Umicore SA (OTC:UMICY) announced that it had entered into a 10-year power purchase agreement (PPA) with Ignitis Renewables. Under the agreement, Umicore SA (OTC:UMICY) will receive renewable electricity from Ignitis Renewables’ onshore Silesia II Wind Farm for its EV materials production plant in Nysa, Poland. The contract will begin from 2025 until the end of 2034. The Executive Vice President ESG and General Counsel at Umicore SA (OTC:UMICY) said:
“Umicore is strongly committed to decarbonizing the battery materials supply chain and to achieving its goal of reaching Group-wide net zero greenhouse gas emissions for scope 1 and 2 by 2035. Electricity from renewable sources like wind and solar energy and the securing of long-term power purchase agreements, including the one with Ignitis, are key in reaching our ambitious targets.”
Companies play a major role in generating wealth and contributing to the GDP of an economy. Now let’s have a look at the countries with the best wealth distribution.
20 Countries with Best Distribution of Wealth
Our Methodology
To determine the countries with the best distribution of wealth, we took data from Insider Monkey’s article on the 30 wealthiest countries by per capita net worth. We ranked the countries based on the Gini coefficient, which describes income inequality or wealth distribution. A Gini coefficient of 0 represents perfect equality and a Gini coefficient of 100 means perfect inequality. We took the data of the Gini coefficient from Credit Suisse’s Global Wealth Databook 2023. We shortlisted the top 20 countries from the list of 30 wealthiest countries by per capita net worth with the minimum score of the Gini coefficient. The countries with the best distribution of wealth are ranked in descending order of this metric. For the countries with similar Gini coefficients, we used the per capita net worth as a secondary metric to break the tie.
20 Countries with Best Distribution of Wealth
20. Switzerland
Gini Coefficient: 77.2%
Wealth Per Capita (2022): $685,226
The wealthiest country by per capita net worth, Switzerland’s total wealth came in at $4.82 trillion in 2022. With a Gini coefficient of 77.2%, Switzerland ranks 20th on our list of the countries with best distribution of wealth.
19. Norway
Gini Coefficient: 76.9%
Wealth Per Capita (2022): $385,338
Norway had a total wealth of $1.64 trillion in 2022. The Gini coefficient of 76.9% makes Norway one of the countries with best distribution of wealth.
18. Austria
Gini Coefficient: 76.1%
Wealth Per Capita (2022): $245,225
Austria ranks among the countries with best distribution of wealth having a Gini coefficient of 76.1%. In 2022, Austria’s total wealth was reported at $1.79 trillion.
17. Israel
Gini Coefficient: 74.9%
Wealth Per Capita (2022): $235,445
Israel had a total wealth of $1.36 trillion in 2022. The Gini coefficient of 74.9% makes Israel one of the countries with best distribution of wealth.
16. Hong Kong
Gini Coefficient: 73.7%
Wealth Per Capita (2022): $551,194
One of the wealthiest countries by per capita net worth, Hong Kong’s total wealth stood at $3.49 trillion in 2022. With a Gini coefficient of 73.7%, Hong Kong ranks 16th on our list of the countries with best distribution of wealth.
15. Denmark
Gini Coefficient: 73.6%
Wealth Per Capita (2022): $409,954
In 2022, Denmark’s total wealth came in at $1.86 trillion. With a Gini coefficient of 73.6%, Denmark ranks fifteenth on our list of the countries with best distribution of wealth.
14. Canada
Gini Coefficient: 72.3%
Wealth Per Capita (2022): $369,577
Canada is one of the leading economies in the world with a reported total wealth of $11.26 trillion in 2022. Canada’s Gini coefficient of 72.3% makes it one of the leading countries with best distribution of wealth.
13. China
Gini Coefficient: 70.9%
Wealth Per Capita (2022): $75,731
With a total wealth of $84.48 trillion in 2022, China is the second wealthiest country in the world. China had a Gini coefficient of 70.9%, making it one of the top countries with best distribution of wealth.
12. Portugal
Gini Coefficient: 70.3%
Wealth Per Capita (2022): $158,840
In 2022, Portugal had a total wealth of $1.32 trillion. With a Gini coefficient of 70.3%, Portugal is ranked 12th on our list of the countries with best distribution of wealth.
11. France
Gini Coefficient: 70.3%
Wealth Per Capita (2022): $312,235
France along with Portugal has a similar Gini coefficient of 70.3%. France has a higher wealth per capita of $312,235 which makes it rank 11th on our list of the countries with best distribution of wealth.
10. United Kingdom
Gini Coefficient: 70.2%
Wealth Per Capita (2022): $302,783
The United Kingdom is one of the largest economies in the world with a total wealth of $15.97 trillion, as of 2022. With a Gini coefficient of 70.2%, the United Kingdom ranks among the countries with best distribution of wealth.
9. New Zealand
Gini Coefficient: 69.9%
Wealth Per Capita (2022): $388,761
In 2022, New Zealand had a total wealth of $1.43 trillion. New Zealand’s Gini coefficient of 69.9% makes it rank among the top countries with best distribution of wealth.
8. Taiwan
Gini Coefficient: 69.8%
Wealth Per Capita (2022): $273,788
Taiwan has one of the best wealth distributions, having a Gini coefficient of 69.8%. In 2022, Taiwan had a total wealth of $5.42 trillion.
7. Poland
Gini Coefficient: 68.4%
Wealth Per Capita (2022): $52,741
Poland had a total wealth of $1.59 trillion in 2022. With a Gini coefficient of 68.4%, Poland ranks seventh on our list of the countries with the best distribution of wealth.
6. Spain
Gini Coefficient: 68.3%
Wealth Per Capita (2022): $224,209
Spain is one of the largest economies in Europe with a total wealth of $8.48 trillion, as of 2022. Spain ranks among the countries with best distribution of wealth with a Gini coefficient of 68.3%.
Click to continue reading and see the 5 Countries with Best Distribution of Wealth.
Suggested articles:
- 11 Undervalued Insurance Stocks To Buy Now
- 20 Countries With The Largest Natural Gas Reserves in 2023
- These Cathie Wood Stocks Are On Sale Now
Disclosure: None. 20 Countries with Best Distribution of Wealth is originally published on Insider Monkey.
Hedge Fund Resource Center