Living rich life gets costlier
If rising prices of food and fuel are hurting the common man, the Richie Rich club has its own inflation-related worries – that is in prices of Chanel bags and Rolex watches among other high-end lifestyle products. In a first-of-its-kind inflation measure for the HNWIs (High Net Worth Individuals), a study has found that prices of high-end lifestyle products have risen by 11.7 per cent in Asia-Pacific region, including India, in the past one year. The study by the Swiss banking major Julius Baer has also found that the rise in this Lifestyle Index, which measures the prices of high-end products used by HNWIs, is in fact much higher than the overall consumer price inflation of 5.1 per cent for the region in the same period. It took into account the prices of 20 lifestyle products and services widely used by HNWIs, such as wine, accessories, cigar and club membership, in four major cities of Asia-Pacific region – Mumbai, Singapore, Shanghai and Hong Kong. The index, published for the first time, was calculated after taking into account the price change in these products over a one-year period ending April 2011. "Based on a basket of 20 luxury goods and services that represent discretionary purchases of HNWI in the region, the index covers high-end vendors across four major cities: Hong Kong, Shanghai, Singapore, and Mumbai," Julius Baer said while announcing the launch of its Lifestyle Index. "The fact that the Index was up 11.7 per cent for the one-year time period until April 2011 shows clearly that the cost of living in luxury in Asia substantially outpaces conventional CPI measures, which stood at 5.1 per cent for the same time period analysed," it added. The Lifestyle Index comprised of items like a bottle of Lafite Rothschild (up about 22 per cent), Chanel bag (up about 17.5 per cent), Steinway Grand Piano (up 16.7 per cent), Tiffany diamond ring (up over 10 per cent), Oyster Rolex watch (up 9.1 per cent), Cohiba siglo VI cigar and Scupltra liquid facelift. While the new index shows living a luxurious life getting costlier, a soaring inflation level, especially in food prices, has already become a major concern for the government, as also the consumers, for many months now in India. The government data yesterday showed the food inflation having entered the double-digit zone after a gap of five months at 10.05 per cent for the week ended August 20, as onion, fruits, vegetables and other items turned costlier. Finance Minister Pranab Mukherjee had said yesterday that the high-level of food inflation was really disturbing and necessary steps needed to be taken to check rising prices. Along with the Lifestyle Index, Julius Baer has also released its first Asia Wealth Report, which it prepared along with brokerage and investment major CLSA. The report said that an estimated 1.16 million HNIs across Asia with wealth of USD 5.6 trillion in 2010 was forecast to more than double to 2.82 million with wealth to almost triple to USD 15.81 trillion by 2015. China alone is forecast to have 1.40 million HNIs with stock of wealth of USD 8.76 trillion by 2015. Terming currency appreciation as a key factor, the report said that it might create six lakh new US-dollar millioniares in Asia by 2015.
SOURCE: financialtimes.com
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