2023 Saw 4.2% Rebound in Global Wealth – UBS Report

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The BCG analysis predicted that by the end of 2027, global wealth would have grown to $329 trillion at a compound annual growth rate of 5.3%.

According to a new analysis by Swiss banking giant UBS, growth in EMEA and Asia-Pacific drove the 4.2% expansion in global wealth in 2023.

UBS’s Global Wealth Report 2024 contrasted this with a 3% reduction in global wealth growth in 2022, which was mostly caused by a strong US currency.

All wealth categories together are seeing global wealth increase. And it seems that the 2022 global wealth slump was only a passing phase, the analysis said, analysing 56 markets that accounted for more than 92% of global wealth at the time.

With very few exceptions, wealth is expanding continuously around the world, albeit at varying rates. Since 2008, the percentage of the global population in the lowest income bracket – those earning less than $10,000 – has decreased, while the percentage of persons in all other wealth brackets has increased.

According to the report, adults in the EMEA (Europe, the Middle East and Africa) region had the highest average wealth of $166,000. This was followed by adults in Asia-Pacific ($156,000) and the Americas ($146,000). However, the average wealth of these adults grew at the slowest rate since 2008, at about 41%, compared to 110% in the Americas and 122% in APAC during the same period.

The COVID-19 epidemic in 2020 sent the global economy into the greatest recession since the Great Depression, resulting in lockdowns in several nations that raised unemployment and lowered wages.

Nonetheless, lower interest rates, restrictions on consumer options, and the substantial financial assistance that governments in many developed nations provided to consumers, along with monetary support policies implemented by central banks, increased household wealth globally.

According to a Boston Consulting Group analysis from last year, the greatest stock market downturn since 2008 caused global wealth to drop by 4% to $255 trillion in 2022.

The BCG analysis predicted that by the end of 2027, global wealth would have grown to $329 trillion at a compound annual growth rate of 5.3%.

According to a UBS analysis, average wealth growth per adult in the Gulf decreased by almost 2% in Saudi Arabia and increased by nearly 6% in the United Arab Emirates in the previous year.

According to the survey, Saudi Arabia has emerged as the leader in wealth growth since 2008. Its rate of growth is over 85%, which is more than twice as high as the UAE’s rate of slightly under 33%.

According to the UBS research, “since 2008, median wealth growth in Saudi Arabia has grown at a rate roughly twice as strong as average growth, surpassing the 170% barrier, and in the UAE, it has grown at a rate nearly three times as strong, at close to 87%.

This implies that people’s fortunes increased far more quickly for those in lower wealth brackets than for their fellow citizens in higher wealth brackets.

In the United Arab Emirates and Saudi Arabia, financial assets account for between 57% and 62% of gross wealth, with debt being relatively low at slightly over 9% in the Emirates and less than 6% in the kingdom. EMEA, in contrast, has an average debt of 15.7%.

In the previous year, one and a half per cent of adults were millionaires.

The US currently has the largest number of USD millionaires at 22 million, followed by China at over 6 million, which is over twice as many as the UK, which is ranked third. According to the research, 38% of the world’s millionaires are from the US.

In anticipation of 2028, the Swiss lender projected that the number of persons in the UAE and Saudi Arabia with assets over $1 million will climb by 15%, or about 80,000 more people overall than in 2023.

According to the report, Switzerland remained at the top of the list for average adult wealth on a per capita basis, followed by Luxembourg, Hong Kong, and the US.

Turkey, Qatar, and Russia experienced the largest gains in wealth in 2023, with Turkey surpassing all other countries with a growth of 157%.

In addition, the UBS analysis predicted that throughout the next 20 years, $83.5 trillion in inherited wealth is anticipated to be transferred.

Before transferring to the following generation, a sizeable portion of this money will first travel between spouses horizontally or intragenerationally. Taking into account that women typically live longer than men, this effectively amounts to a significant wealth transfer to them, the report stated.

Nine trillion of this, most of which will be in the Americas, is predicted to be transferred horizontally between spouses. It is anticipated that women will pass on more than 10% of the $83.5 trillion in total to the following generation.