Global wealth rose sharply in 2021, particularly in North America and China, thanks to positive developments in equity markets and economic support measures implemented by central banks.
Rising inflation, rising interest rates and falling stock markets could weigh on this trend in 2022.
Global wealth stood at 463,600 billion dollars (447,094.9 billion francs), an increase of 9.8% at the current exchange rate. Excluding currency variations, the increase was 12.7%, “the highest annual growth rate on record,” Credit Suisse said on Tuesday in publishing the 13th Global Wealth Report.
Wealth per adult globally increased 8.4% to $87,489 and 11.3% excluding the exchange rate effect. In Switzerland, assets per adult are $696,000, the highest level in the world.
“Analysis of average wealth within countries and globally shows that global wealth inequality has declined this century, due to accelerated growth in emerging markets,” argues economist Anthony Shorrocks, author of the report.
The study also highlights that the wealth share of the world’s richest 1% increased for the second year in a row to 45.6% in 2021 from 43.9% in 2019. The Dollar Millionaires Club welcomed 5.2 million members (+9%), bringing their number to 62.5 million people worldwide.
Less rich in Switzerland
As for the very rich (UHNWI for “ultra high net worth individual”), their number jumped 21%, mostly in the United States and China. “Relatively few countries have seen a decline in the number of very wealthy people,” notes Credit Suisse.
Switzerland (minus 120), Hong Kong (minus 130), Turkey (minus 330) and the United Kingdom (minus 1130) saw the steepest declines.
All regions of the world saw an improvement in the wealth of their inhabitants, but North America and China particularly stood out. The former region accounts for half of the increase and China for a quarter. Africa, Europe, India and Latin America together accounted for just 11.1% of growth. “This figure reflects the widespread depreciation against the US dollar in these regions,” the two-veil bank’s statement noted.
Regarding women’s wealth, Credit Suisse estimates that of the 26 countries that represent 59% of the world’s adult population, 15 countries, including China, India and Germany, saw a decline in women’s wealth between 2020 and 2021.
Along with wealth, household debt rose by 4.4% worldwide.
The positive evolution of equity markets in 2021 largely explains the strong growth in global wealth. In addition, exchange rate fluctuations are often the cause of significant gains and losses in wealth valued in US dollars, the study authors note.
Deceleration in 2022/2023
“While a reversal of the 2021 wealth windfall in 2022/2023 is likely as several countries face slowing growth or even recession, our five-year outlook projects that wealth will continue to grow,” said Nanette Hechler-Fayd’ herbe, head of investment for the Europe, Middle East and Africa region.
Global inflation and the war in Ukraine could weigh on real wealth creation in the coming years, the study warns. However, global dollar wealth is expected to fall by 36% by 2026, driven by momentum in low- and middle-income countries.
Assets per adult are expected to increase by 28% by 2026 and surpass the $100,000 threshold in 2024. The number of millionaires is expected to increase to 87 million and the very rich to register at 385,000.
This article was automatically published. Source: ats/awp