Global wealth fell for the first time since the global financial crisis in 2022, a new report showed, as plunging stock markets and a strong dollar weighed on global asset prices.
this Global Wealth Report The UBS and Credit Suisse 2023 Report, released Tuesday, found that total private wealth fell 2.4 percent, or $11.3 trillion, to $454.4 trillion last year; per capita wealth fell 3.6 percent, or $3,198, to $84,718.
Holding the exchange rate constant in 2021, total wealth actually increases by 3.4% in 2022. But that still amounts to “the slowest growth in wealth at constant exchange rates since 2008,” said the authors of the report, which covers holdings of $540 million among one billion adults worldwide.
In 2022, the global economy is struggling to recover from the COVID-19 era. High inflation has forced many central banks to raise interest rates and the war in Ukraine has weighed on growth, raising borrowing costs for consumers and businesses.
Developed regions were hardest hit as stock and bond prices fell throughout the year. North America and Europe lost a combined $10.9 trillion in wealth last year, while Asia-Pacific lost $2.1 trillion.
On the other hand, wealth in Africa and India will grow by 1.5% ($85 billion) and 4.6% ($675 billion) respectively in 2022. Latin America was an “outlier” Switzerland last year, according to UBS and Credit Bank. Total wealth in the region rose by 18.6 percent ($2.4 trillion), driven by offshoring of U.S. manufacturing and an average 6 percent appreciation of currencies against the dollar.
At the national level, the U.S. saw the largest decline in nominal wealth at $5.9 trillion, but it was down only 4.1% from a year ago. In percentage terms, Egypt has had its worst year, with average household wealth falling by 22.7% due to soaring inflation and a 37% devaluation of the Egyptian pound.
The big winner in 2022 is Brazil. The country’s average household wealth soared 31.6% ($1.1 trillion), partly due to relatively strong GDP growth of 2.9% and the appreciation of the Brazilian real against the dollar. Wealth also rose in Russia and Mexico by 16.1% and 15.4%, respectively. The Mexican currency strengthened against the dollar and GDP rose 3.1%. At the same time, housing prices in Russia have risen sharply amid falling interest rates, and the Russian ruble has appreciated by 5.6% during the year.
While global wealth will decline in 2022, UBS and Credit Suisse expect an upturn in the coming years. According to Nannette Hechler-Fayd’herbe, chief information officer for EMEA and head of global economics and research at Credit Suisse, global wealth will grow by 38% to $627 trillion by 2027 as middle-income countries continue to grow, And called it “brighter prospects.” “
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