Average wealth of a person in Europe dips 5 per cent over 2005-2015: Report

NEW YORK: Wealth creation in Europe is on a decline and the average wealth of a person has dipped 5 per cent over the past 10 years, says a report.

According to New World Wealth, while the average wealth of a person in Europe has declined, in other developed markets it has increased substantially.

"Over the past 10 years (2005-2015), the average wealth of a person in Europe has declined by 5 per cent," the report said, adding over this same 10-year period, the average wealth of a person in Australia increased by over 100 per cent and in Canada by over 50 per cent.

In terms of wealth growth, the report said certain European countries such as Poland and Malta are likely to perform well. However, not much growth is expected to come from Western and Southern Europe as countries like Germany, France, Italy and Spain will struggle.

Major issues that have deterred wealth creation in Europe over the past 10 years include migration of wealthy people and loss of jobs to Asia, particularly in the manufacturing sector.

"Going forward, we expect Europe to continue to lose primary sector jobs to Asia, particularly to emerging countries such as: China, India, Sri Lanka, the Philippines and Vietnam," the report noted.

Some of the other reasons behind the decline in wealth creation include rising income tax rates, which has deterred new business formation, rising religious tensions, especially in urban areas and inability of certain countries to handle large pension obligations like Greece.

Moreover, global financial crisis in 2008 and the related housing crisis, which heavily impacted on the wealth of most European citizens and location (next to troubled Middle East and North Africa) also played its part in decline in wealth creation in Europe