in 2022, the volume of world wealth decreased by 4%, to $255 trillion

The international consulting company BCG has published its annual report on the dynamics of the world state. At the end of 2022, the volume of financial wealth decreased by 4%, to $255 trillion due to rising global inflation and the military conflict in Ukraine, while the overall world wealth increased by only 1%. But already this year, analysts expect a recovery of positive dynamics, predicting a growth of 5% to $267 trillion.

In the Global Wealth Report released today (.pdf) BCG analysts note that at the end of 2022, the volume of global financial condition declined for the first time since the global financial crisis of 2008. In 2022, the total financial condition (financial assets, liabilities and real assets) was at the level of $255 trillion, which is 4% less than in 2021.

The total wealth of the world—that is, including the wealth of individuals—was $516 trillion last year, just 1% more than in 2021.

At the end of 2021, despite the COVID-19 pandemic, the total wealth increased by 10.6% and reached a record $530 trillion.

BCG connects the negative trend of last year with record high rates of global inflation and the military conflict in Ukraine. “The first downturn in the global financial wealth market since the 2008 crisis came after a 10 percent rise in 2021,”— noted Managing Director, BCG partner and one of the co-authors of the report, Michael Kalich. Financial health declined last year in North America and Europe, but growth continued in regions such as the Asia-Pacific Region, the Middle East, Africa and Latin America.

BCG also notes that against the backdrop of geopolitical events, a significant outflow of Russian assets from Europe to the Middle East was recorded last year. Thanks to this, in 2022-2027, the Middle East will show the highest average annual growth in financial assets – by 9.6%. Asia will take second place in terms of growth (plus 9%), mainly due to China, Japan and India.

For now, Switzerland remains “the world’s largest location for financial cross-border wealth” with $2.4 trillion.

In second place Hong Kong with $ 2.2 trillion, on the third – Singapore with $1.5 trillion. The top 10 also includes countries and regions such as USA, Great Britain, channel islands And Isle Of Man, UAE, Luxembourg, Cayman islands And Bahamas.

BCG expects that this year the situation will begin to recover. Analysts are waiting for the growth of world financial condition by 5%, up to $267 trillion. “We believe that the improvement in the macroeconomic situation this year and the recovery of the stock market will help return to growth in 2023, and in the period from 2022 to 2027 the average annual growth will be 5.3%,” said Mr. Kalich.

Evgeniy Khvostik