For the first time since the 2008 financial crisis, global wealth is declining. The Global Wealth Report conducted by Credit Suisse and UBS revealed that in 2022 global private wealth fell by 2.4% to $454.4 trillion.
This decrease is considerable compared to the results of the same report back in 2021 when global wealth went up by 9.8%. Nannette Hechler-Fayd'herb, Global Head of Economics and Research at Credit Suisse said:
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.
"High inflation and the appreciation of the US dollar"
Economist Anthony Shorrocks, who is the author of the study, explained that the fall in the level of wealth globally is largely the result of "high inflation and the appreciation of the US dollar against many other currencies."
In addition, he acknowledged that financial assets (liquid) were the most responsible for wealth reductions. Meanwhile, "non-financial assets, mostly real estate, stayed resilient despite rapidly rising interest rates."
The regions with the most requests and profits
The study indicated that the regions that lost the most wealth were the same ones that were considered to have the greatest wealth: North America (4.5%) and Europe (3.4%) together accounted for most of the decline by $10.9 trillion. Asia and the Pacific lost a combined $2.1 trillion (2.6%).
By country, the United States leads the ranking with a $5.9 trillion loss, followed by Japan, China, Canada and Australia.
Latin America was the only region that had an increase in wealth, going up to $2.4 trillion, 18.6% more than in 2021. Brazil, Mexico and India were the countries with the most growth, along with Russia, which was the country with the highest gains in 2022, despite its war with Ukraine.
Record growth over the next five years
However, the report forecasts that global wealth will increase in the next five years by 38% and it should go up to $629 trillion in 2027.