Global (common Wealth) _ Global wealth, as defined by personal holdings of assets ranging from real estate to stocks and shares, is expected to climb 38% by 2027, driven primarily by emerging nations, according to a research released on Tuesday by Credit Suisse and UBS (UBSG.S).
According to the annual Global Wealth Report, which calculates the wealth of 5.4 billion individuals in 200 markets, global wealth will reach $629 trillion in the next five years.
Despite the optimistic forecast, 2022 will see the first decline in net worldwide household wealth since the 2008 global financial crisis. Net private wealth fell 2.4% in nominal terms last year, with the loss concentrated in more prosperous regions such as North America and Europe, according to the World Bank. A rising US currency was a significant factor.
Russia, Mexico, India, and Brazil saw the greatest increases in wealth last year. According to the analysis, wealth in rising economies, including the BRICS (Brazil, Russia, India, China, and South Africa), would increase by 30% by 2027. It anticipates that further growth in developing markets will help to reduce global wealth inequality in the coming years.
Financial assets had the greatest reductions last year, as compared to non-financial assets such as real estate, which remained resilient. Individually, this meant that adults were $3,198 worse off by the end of the year.
However, worldwide median wealth, probably a more accurate estimate of how the average individual is faring, increased by 3% in 2022, compared to a 3.6% drop in wealth per adult, according to the research. This century has seen a five-fold increase in median wealth, owing partly to fast wealth growth in China.
According to the research, global wealth loss was disproportionately concentrated in affluent regions such as North America and Europe, which lost a combined $10.9 trillion. The United States leads the list of countries that will suffer market losses in 2022, followed by Japan, China, Canada, and Australia.
Despite significant decreases in mean wealth since 2021, Switzerland continues to top the list of wealth per adult, followed by the United States, Hong Kong, Australia, and Denmark. Belgium, Australia, Hong Kong, New Zealand, and Denmark are the top five markets in terms of median wealth.
Furthermore, wealth per adult fell by $3,198 (or 3.6%) to $84,718, implying that people have less this year than they did last year at this time. The appreciation of the US dollar against many other currencies contributes significantly to this drop. In contrast to the 3.6% fall in wealth per adult, worldwide median wealth increased by 3% in 2022. Non-financial assets such as real estate were resilient in 2022, despite rapidly rising interest rates.
According to the report, by 2027, middle-income markets will drive global trends, with wealth per adult predicted to reach $110,270, millionaires expected to number 86 million, and ultra-high-net-worth people (UHNWIs) expected to number 372,000.
While Generation X and Millennials fared well in the United States and Canada in 2022, they were not immune to general wealth erosion.
African-Americans were mostly unscathed by the 2022 recession, although non-Hispanic Caucasians saw their wealth fall. Hispanics, on the other hand, recorded 9.5% increase in 2022 due to their larger holdings of housing assets.1
Wealth inequality fell further in 2022, with the wealthiest 1% of the global population owning 44.5% of the world’s wealth. In 2022, there were 59.4 million USD millionaires worldwide, a 3.5 million decrease from 2021. The figure excludes the 4.4 million “inflation millionaires” who would lose their millionaire status if the millionaire threshold were modified for inflation in 2022.
