PETALING JAYA: The gross financial assets of Malaysia’s private households increased 7.3% in 2020 to €18,240 (RM87,782) per capita at the end of the year, according to the “Allianz Global Wealth Report 2021”.

       However, this growth rate remained markedly below the regional average, as despite the Covid-19 crisis, gross financial assets of Asian (excluding Japan) households rose by a healthy 12.7% in 2020, even faster than in the already strong previous year (9.8%), said Allianz in a statement.

       In terms of net financial assets per capita, Malaysia ranked sixth in Asia behind China and 37th in international comparison.

       In Malaysia, the growth driver in 2020 was the increase in securities with 10.6%. Life insurance and pension fund assets grew by 7.4% and deposits by 4.2%.

       As a result, the share of life insurance and pension fund assets in the private households’ portfolio increased to almost 40%, while deposits and securities each amounted to around 30%. With a plus of 5.5%, liabilities growth in the country remained at the same level as in 2019.

       However, due to the decrease in the gross domestic product (GDP), private households’ debt-to-GDP ratio climbed to a record high 93.3%, one of the highest levels in Asia.

       Though net financial assets increased by 8.8% to an average €9,950 (RM47,885) per capita, the high indebtedness gives reason for concern, as the average liabilities amount to around half the average gross financial per capita.

       However, these figures represent only the average; in the low-income groups that were hardest hit by the impact of the Covid-19 pandemic, the over-indebtedness is expected to remain an issue, especially against the background of an expected uneven recovery of the labour market.

       Meanwhile, Allianz expects that global GDP will grow strongly in 2021, powered by the vaccination campaign which allows economies to re-open, as well as loose monetary policies and generous fiscal support.

       Barring any major stock market corrections, 2021 should turn out to be another good year for savers, with overall growth in financial assets globally of around 7%. “The head numbers are very impressive”, said Ludovic Subran, chief economist of Allianz.

       “But we should dig deeper. Most households did not really save but simply put money aside. All this idle money on bank accounts is a wasted opportunity. Instead, households should invest in their retirement and the green transition, enabling societies to master the challenges we face, climate and demographic change. My fear is that if households start to dishoard, money will end up in revenge consumption and will only fuel inflation. We need a new ‘savings culture’.”