In 2022, global wealth declined for the first time since 2008, according to Credit Suisse and UBS Global Wealth Report

Global wealth has been declining in the past year due to the strengthening of the dollar (it lowered the valuation of assets in developing countries), as well as due to the fall in stock prices – this effect has affected developed markets more. The total fell 2.4% for the first time since 2008, according to data from Credit Suisse and UBS. In 2023, however, the opposite situation may arise – the contribution of the growth of financial assets may turn out to be positive, while real estate will become cheaper against the backdrop of higher interest rates.

In 2022, global wealth declined for the first time since 2008, according to a joint report by Credit Suisse and UBS Global Wealth Report (in March, Credit Suisse applied for financial support from the Swiss authorities and was later bought out by UBS). Total personal assets decreased over the year by $11.3 trillion (minus 2.4%), to $454.4 trillion. In terms of a person, the indicator decreased by 3.5% – $84.7 thousand.

The decrease is largely due to the strengthening of the dollar against the currencies of developing countries (this effect is estimated at 5.8%), the authors of the report note (similar dynamics are observed in the comparison of countries in terms of GDP – the World Bank recently updated estimates for 2022). If the exchange rates were fixed at the level of 2021, then global wealth would increase by 3.4%, and in terms of a person – by 2.2%. This, however, is still the lowest increase since 2008. Moreover, accounting for inflation (minus 6% of the nominal indicator) leads to a decrease in the general welfare indicator by 2.6% in 2022 (and per capita – by 3.8%). In addition, the decline in wealth was primarily due to financial assets (minus 6.8%, or $19 trillion), while the volume of non-financial assets (mainly real estate), on the contrary, increased by $7.9 trillion. In 2023, due to lower housing prices (including against the backdrop of higher mortgage rates in the US and European markets) and the recovery of stock indices, the situation may be reversed.

The decline in financial markets is associated with a decline in wealth in developed countries (the US and Europe accounted for a $10.9 trillion decline, the Asia-Pacific region — $2.1 trillion, but growth in 2021 was more impressive — the increase in financial assets in the US amounted to $19 .5 trillion). In Latin America, on the contrary, wealth even grew by $2.4 trillion (this was facilitated by the strengthening of regional currencies by 6% against the US dollar, which violated the global trend). In China, there was a decrease in both asset classes, but only in US dollars. The largest increase in wealth among individual countries was recorded in Russia (probably against the background of the strengthening of the ruble, the authors also point to a significant increase in property values), as well as in Mexico, India and Brazil. In terms of wealth per capita, Switzerland, the USA, Hong Kong, Australia and Denmark remain leaders (this is more related to the cost of real estate than to finances).

The decline in overall wealth was expectedly accompanied by a decrease in income inequality – the share of assets of the top 1% decreased to 44.5% (2020 level), and the number of dollar millionaires – by 3.5 million people, to 59.4 million. Median (more than indicative from the point of view of the boundary of the typical level of wealth) while increasing by 3%. Since 2000, it has quintupled and grown almost twice as fast as per capita wealth, an effect attributed primarily to China’s faster growth.

Tatyana Edovina