A new report on global wealth by Swiss banking group Credit Suisse shows that Romanian households suffered the biggest percentage drop in wealth from mid 2011 to mid 2012. Household wealth fell by 36 percent over the year in Romania, the world's steepest decline. Regionally, European household wealth saw the largest fall in the period and although as a percentage the drop was biggest in Romania, in total value the fall was greater in larger EU economies, such as France, Italy and Germany.

Other regional EU states also saw steep falls; household wealth in Hungary registered a 25 percent drop, while the Czech Republic and Poland both saw 18 percent falls between mid 2011 and mid 2012. At the other end of the spectrum, Colombia recorded a 16 percent rise in household wealth, the sharpest increase seen. Meanwhile Algeria, Hong Kong, Peru and Uruguay also recorded gains of more than 5 percent.

Exchange rates played an important role in the results; Colombia's stable dollar exchange rate contributed to the rise, while the 19 percent fall of the Romanian leu against the dollar, from RON 2.97 against USD 1 to RON 3.55 to the dollar over the 12 month period according to Romania's Central Bank (BNR), wiped value of Romanians' assets. The euro has also suffered a 16 percent decline against the dollar over the same period, contributing to the poor eurozone results.

According to Credit Suisse, economic uncertainties of the past year – particularly in the eurozone – have had a negative impact on household wealth. “Economic recession in many countries, combined with widespread equity price declines and relatively subdued housing markets, has produced the worst environment for wealth creation since the outbreak of the financial crisis,” reads the Credit Suisse report. This, according to Credit Suisse, has contributed to total global household wealth falling by 5.2 percent to USD 223 trillion between mid-2011 and mid-2012, the first annual decline since the financial crisis of 2007 – 2008.

The global situation is, however, different to during the financial crisis and Credit Suisse highlights the role of an appreciating dollar in the overall result. Using constant exchange rates, aggregate global household wealth would have risen by 1 percent.

Liam Lever, liam@romania-insider.com