High wealth index shows 19,000 people worth over $1m in Ireland
DESPITE the near collapse of the Irish economy. the number of people in Ireland with more than $1m (€694,000) in financial assets climbed by more than 5pc last year, it was revealed yesterday.
The annual Merrill Lynch/Cap Gemini World Wealth Report shows there were some 19,000 so called "high net worth individuals" (HNWIs) in Ireland during 2010, up from 18,100 a year earlier.
While the 5pc growth may seem high it is below the European average 6.3pc and is from a relatively low base. The number plummeted by 20pc in 2008. It is half the 10pc growth seen last year.
Merrill Lynch's chief investment officer for Europe, the Middle East and Africa, Bill O'Neill said that while he was surprised at the growth, it was down to high savings rather than a great expansion in Ireland.
"There is a recovery and that's important but it is being driven by national savings which increased 1pc to 35.5pc," Mr O'Neill said.
"Merchandise export values have been on an upward trend since 2009 while goods and services exports expanded by 7pc in 2010.
"The contraction in private and public sector consumption has been a by-product of the increased savings," he added.
The report showed few indicators for greater growth in the short term, with property expected to fall for the foreseeable future, while rising unemployment, public sector pay cuts, and tax rises are all expected to adversely impact on wealth.
It was a different story outside Ireland and Europe, however. Globally, the HNWI population grew by 8.3pc, down slightly from 9.7pc a year ago, with the Asia Pacific region now the second largest region for HNWIs. More than half the global population remain concentrated in the US, Germany and Japan, however.
Mr O'Neill also warned that while he did not expect Greece to default on its debts "in the short term", the wider issues in Greece have yet to be addressed.
"We take the view that Greece will agree on an austerity package next week and the necessary monies will be distributed in July by the troika.
"In July we expect a two to three-year programme will be put in place to fund Greece but none of this ultimately addresses the long-term solvency of the Greek state.
"So much of this depends on the Greek austerity drive. Even if the solvency issue is settled we need to see how Greece can move into sustainable growth in the long term.
"In the next three to six months a package that would get Greece to 2014 would be very helpful but we can't say if that would be the end of it," he added.