118,000 Koreans Are Millionaires

By Lee Hyo-sik
Staff Reporter

The number of South Koreans holding more than $1 million in net assets rose 18.9 percent in 2007 from a year earlier on bullish stock markets at home and abroad. The double-digit increase was the fourth largest in the world after India, China and Brazil whose citizens got richer faster on strong economic expansion.

According to the 2008 World Wealth Report, jointly prepared by consulting firm Capgemini and investment bank Merrill Lynch, the number of high net worth individuals with over $1 million in net assets here stood at 118,000 as of the end of last year, up 18.9 percent from 2006.

The number of millionaires in India rose 22.7 percent to 123,000, the highest year-on-year increase in the world, followed by a 20.3 percent growth in China.

The number of millionaires totaled 10.1 million across the globe last year, up 6 percent from the previous year. They each had on average $40.7 trillion, up 9.4 percent.

North America topped the list in the number of millionaires as more than 3.3 million people in the continent had net worth over $1 million, followed by 3.1 million in Europe.

``Many Koreans became richer on their equity investments here and abroad last year because of strong market performance. The story is pretty much the same all over the world. In particular, investors in China, India and other emerging economies got rich fast, thanks to the bullish markets in those countries,'' said Shin Min-young, an economist at LG Economic Research Institute. The KOSPI rose to an all-time high of 2,064.85 on Oct. 31 last year

However, equity markets across the globe, particularly those in emerging economies, have headed downward since the beginning of the year as surging oil and other commodity prices weigh down on investment sentiment amid the credit crunch and other financial market jitters, following the U.S. subprime mortgage debacle.

Shin said if the stock markets continue to remain sluggish or deteriorate further, the number of new millionaires will likely grow at a much slower pace this year than the previous year.

``The number of the rich here increased significantly last year. But at the same time, a large number of working middle-class families fell into poverty amid stagnant income growth as a result of sluggish business conditions and job creation, pointing to the widening income gap between the haves and have-nots,'' Shin noted.

According to the Korea Development Institute, middle-class households accounted for 54.5 percent of the total in 2006, down from 61.9 percent in 2000 and 68.5 percent in 1996, while low-income bracket accounted for 17.9 percent in 2006, up from 11.2 percent 10 years ago.

The top 20 percent by income bracket earned 4.49 times more than the bottom 20 percent of households in 1996. But the gap widened to 6.79 times in 2000 and 7.02 times in 2006, indicating that income disparity deepened over the past 10 years.

leehs@koreatimes.co.kr

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