Home Business Coronavirus chaos: Devastating new report outlines eyewatering TRUE cost of pandemic

Coronavirus chaos: Devastating new report outlines eyewatering TRUE cost of pandemic

Ten years of growth has meant the rich of the world have increased their wealth at double the rate of middle-income and poor people. But they are more exposed to volatility as a larger proportion of their wealth is dependent on equities markets behaving normally.

This would mean a larger chunk of wealth has been lost due to coronavirus than was lost in the 2008 financial crisis, which erased £8trillion ($ 10trillion).

Last year, global wealth saw an increase of 9.3 percent to £180.49trillion ($ 226trillion), according to the Boston Consulting Group (BCG) report.

Alongside this, the numbers of millionaires in the world have tripled over the past two decades.

The report says: “While the speed of the recovery depends to a large extent on the success of public health measures, as well as on interventions from governments and central banks, the pandemic will almost certainly cause wealth to contract in the near term.”

READ MORE: How the Bank of England could rebuild its coronavirus war-chest

Trillions is being wiped from global wealth. (Image: Getty)

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The mega rich still expect to gain as the economy recovers. (Image: Getty)

The BCG lays out three scenarios for the wake of the coronavirus: a quick rebound, slow recovery and lasting damage.

In the case of a quick rebound, wealth managers are unlikely to endure a long-term hit.

A slow recovery would see wealth margins contract, and an increase in consolidation in the industry.

In a case of “lasting damage” global wealth would still hit £194.07trillion ($ 243trillion) by 2024.

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The pandemic has seen the UK’s GDP crash. (Image: Express)

“The segment that will be hit the hardest in the slow recovery and lasting damage scenarios will be the wealthiest, the millionaires and the billionaires, simply because of the high exposure to equity markets and market volatility,” Anna Zakrewski, global leader of BCG’s wealth management practice and the lead author of the report told Bloomberg.

While China and Germany rank highly for the mega-wealthy the vast majority of millionaires live in the US, according to the report.

Data releases over the past few weeks have spelled trouble for global economies.

The UK’s Office for National Statistics revealed last week that GDP had crashed by 20.4 percent, the largest recorded fall on record.

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Bank of England is poised to announce a rate decision later on today. (Image: Getty)

Economists have also voiced fears that the UK could be headed for deflation as retailers slash prices to lure consumers back into whops.

Equity markets face an uncertain future, with volatility unlikely to let up at any point soon.

The Bank of England is poised to unleash more measures to help the economy later on today, with investors expecting another round of quantitive easing.

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