TAIPEI (Taiwan News) — The wealth gap between the richest households and the bottom 20% of households has reached 66.9 times, a fourfold increase from 30 years ago, according to data from Taiwan’s Directorate General of Budget, Accounting and Statistics (DGBAS) released on Monday (April 29).

DGBAS Census Department Director Pan Ning-hsin (潘寧馨) admitted that the wealth disparity between rich and poor widened in Taiwan but added this was the case in many liberal economies. Furthermore, widening wealth disparity is more pronounced in other developed countries as it is associated with personal financial management, asset allocation, and family wealth accumulation. 

Taiwan fared well when compared to the wealth gap in other developed countries, like Australia (93.1 times), the U.K. (109.5 times), South Korea (14.1 times), and France (627.4 times). Pan attributed the savings habits of Taiwanese people across all economic levels as the reason Taiwan’s wealth disparity is less than that of other countries. 

The DGBAS said its recent wealth reporting was based on data from 2021, as wealth calculations are difficult to compile, relying mostly on personal financial survey information and big data. The difficulty of reporting is also why the prior report was released 30 years ago (1991), potentially discounting the effectiveness of comparing the two findings, per China Times.

DGBAS found the average household wealth at the end of 2021 was NT$16.38 million (US$502,467), while the average wealth of Taiwan’s top 20% of richest families was NT$55.33 million, and the wealth of the poorest 20% of families was just NT$770,000.

In recent years, monetary easing policies by central banks around the world have led real estate prices to rise, along with stock markets reaching new highs. After the Taiwan stock index (TAIEX) reached the 20,000-point mark, the gap between the rich and the poor has widened, according to Norman Yin (殷乃平), an economics professor at National Chengchi University.

DGBAS said the wealthiest 20% of families typically have cash, deposits, stocks, and mutual fund holdings, accounting for 57.6% of their wealth. This is a significantly higher percentage than the median family, which averages just 47.1% of their holdings in such assets.

Pan said that anyone who started buying stocks or investment funds 30 years ago would have profited, potentially adding to the disparity in wealth distribution. However, different wealth groups choose various investment methods, which can affect their wealth accumulation.

It is worth noting that the average debt of each household in the bottom 20% of wealth is NT$4.05 million. DGBAS said this level of debt is much higher than the average median debt of 2.2 million per household, potentially attributed to mortgages or losses from investments.