Global Wealth Expected to Surge Despite Setbacks— 38% Growth Projected

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Can a world marked by setbacks witness a staggering 38% surge in global wealth? The answer lies in the remarkable projection of $629 trillion by 2027, unveiled in the 14th Global Wealth Report.

The horizon offers hope in a world that has been navigating economic uncertainties. 

Global wealth is poised for a staggering 38% surge over the next five years, reaching a monumental $629 trillion by 2027, defying the setbacks faced in 2022. 

This promising outlook is unveiled in the 14th edition of the Global Wealth Report, a collaborative effort between Credit Suisse and UBS. 

Despite 2022 witnessing the first dent in wealth since 2008, the report paints a resilient picture, buoyed by the tenacity of middle-income markets to spearhead global financial trends.

Ups and Downs: Numbers That Tell the Tale

The narrative is captured vividly in numbers, with projected wealth per adult reaching a notable $110,270 by 2027. The future also foresees a remarkable 86 million millionaires and 372,000 ultra-high-net-worth individuals. 

However, 2022 wasn’t without its challenges; net private wealth contracted by $11.3 trillion (-2.4%) to rest at $454.4 trillion by the year’s end. 

Concurrently, individual wealth saw a dip, with wealth per adult retreating by $3,198 (–3.6%) to rest at $84,718. 

The primary drivers of this decline were the appreciation of the US dollar and a substantial retreat in financial assets.

A Regional Kaleidoscope: Winners and Losers

Zooming into regional dynamics, it becomes clear that the tale of wealth divergence was palpable. 

Wealthier regions, North America and Europe bore the brunt of the decline, shedding an astonishing $10.9 trillion. 

In contrast, the Asia Pacific region faced losses of $2.1 trillion. At the same time, Latin America stood out as an outlier, witnessing an increase of $2.4 trillion, propelled by currency appreciation against the US dollar. 

This intricate dance of gains and losses placed the United States, Japan, China, Canada, and Australia at the forefront of market losses. 

At the same time, Russia, Mexico, India, and Brazil experienced the thrill of gains.

Wealth Inequality and Median Triumphs

Amidst these shifts, wealth inequality also experienced a recalibration, with the top 1% witnessing a reduction in their wealth share to 44.5%. 

The roster of USD millionaires globally shrank by 3.5 million in 2022 to 59.4 million. 

Notably, this figure doesn’t consider the 4.4 million “inflation millionaires” who’d fall below the millionaire threshold if adjusted for inflation in 2022. 

A more encompassing indicator, global median wealth, saw a 3% rise in 2022. 

This indicator, reflecting the fortunes of the typical individual, has quintupled this century, primarily driven by China’s surging wealth.

Voices from the Financial Arena

Iqbal Khan, President of Global Wealth Management at UBS, encapsulated the essence of the report: 

“This sweeping household wealth analysis covers the estimated wealth holdings of 5.4 billion adults worldwide and across the wealth spectrum. It looks to future trends, helping us to frame expectations, understand the ever-changing nature of wealth creation, and better conceive of the power of wealth to benefit our society broadly.”

Economist and report author Anthony Shorrocks delved into the intricacies, highlighting the role of inflation and the US dollar’s appreciation in the 2022 wealth downturn. 

He emphasised, “Keeping exchange rates constant but counting the effects of inflation results in a real wealth loss of –2.6% in 2022. Similarly, financial assets contributed most to wealth declines while non-financial assets (mostly real estate) stayed resilient, despite rapidly rising interest rates.”

With numbers as diverse as the global population they represent, the report showcases wealth and the spirit of resilience and adaptability. 

As the world teeters on the precipice of economic change, these insights offer a compass for the journey ahead. 

Through ups and downs, the tapestry of global wealth continues to evolve, painting a picture of potential, promise, and the steadfast spirit of a world in motion.

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