Val Srinivas, head of research for the Deloitte Center for Financial Service, said demographic trends, as well as general economic growth, are providing greater opportunities for businesses and fueling the rise in millionaires in India and China.
“We expect that in a country like India, where the family business sector retains a strong foothold, their presence likely contributes to the increase in the number of millionaire households,” he said.
A study by Deloitte, released in May this year, found that India looks set to experience huge growth in total millionaire wealth over the next decade, increasing by 405%.
The report, called The Next Decade in Global Wealth among Millionaire Households, says the Asian country will see the highest growth in millionaire wealth of the BRIC - Brazil, Russia, India and China - economies.
“Our analysis suggests that the number of millionaire households in India will grow from 286,000 to 694,000 between 2011 and 2020, a growth rate of 143%,” the report said.
Although India is likely to have the highest per capita wealth among millionaires of the emerging economies by 2020, the number of wealthy will be small in comparison to the country’s population. The country is expected to appear at the bottom of the density of millionaire households ranking - just 0.3% of households will hold more than $1 million in wealth.
However, of the 25 countries examined, the research predicted that India would have the fifth highest number of households with between $5 million and $30 million.
“Both India and China are starting from a much smaller base of millionaire households, so that these two countries – relatively speaking – can experience substantially greater growth percentage rates by adding fewer millionaire households than a developed country with a higher base of millionaire households,” said Srinivas.
The US will continue to have the greatest number of millionaire households, potentially rising from 10.5 million households in 2011 to 20.5 million households in 2020, according to Deloitte.
However, Hong Kong will have the highest density of millionaires in 2020, with 47% of the population holding more than $1 million.