According to a joint report by Credit Suisse and UBS, the total net private wealth worldwide experienced a decrease of 2.4% to $454.4 trillion by the end of last year. This decline marks the first since the 2008 financial crisis.
The report attributes much of the $11.3 trillion fall to the appreciation of the US dollar against several other currencies. It revealed that financial assets were the main contributors to the decline in wealth in 2022, while non-financial assets, such as real estate, remained resilient despite the rapidly rising interest rates. The survey showed that wealth per adult declined by 3.6% to $84,718.
Losses in wealth were heavily concentrated in regions such as North America and Europe, which together shed $10.9 trillion. The Asia Pacific region recorded a decline of $2.1 trillion, while Latin America stood out with a total wealth increase of $2.4 trillion, facilitated by an average 6% currency appreciation against the US dollar.
In terms of countries, the United States saw the greatest losses, followed by Japan, China, Canada, and Australia. On the other hand, the largest increases in wealth were recorded for Russia, Mexico, India, and Brazil.
Nannette Hechler-Fayd’herbe, the global head of economics and research at Credit Suisse, commented, “Wealth evolution proved resilient during the Covid-19 era and grew at a record pace during 2021. But inflation, rising interest rates, and currency depreciation caused a reversal in 2022.”
Despite the dip in global wealth, the report projects that it will rise by 38% over the next five years, reaching $629 trillion by 2027. The primary driver of this growth is expected to come from middle-income countries. Furthermore, researchers estimate that wealth per adult will reach $110,270 in 2027, and the number of millionaires is predicted to reach 86 million, while the number of ultra-high-net-worth individuals (UHNWIs) is likely to increase to 372,000.
The findings of this report emphasize the dynamic nature of global wealth, influenced by various economic factors such as inflation, interest rates, and currency fluctuations. It highlights the importance of monitoring these factors closely to understand their impact on private wealth and its distribution across different regions and countries.
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