Strong global wealth growth in 2021

Credit Suisse’s Global Wealth Survey shows a 10% increase to $463.6 trillion, thanks largely to the United States and China.

Global wealth has grown significantly in 2021, particularly in North America and China, thanks to the positive performance of stock markets and the economic support measures put in place by central banks. Rising inflation, rising interest rates and falling stock markets could weigh on this trend in 2022.

Global wealth was $463,600 billion (447,094.9 billion Swiss francs), an annual increase of 9.8% at current exchange rates. Excluding currency fluctuations, the increase was 12.7%, “the highest annual growth rate on record,” Credit Suisse said on Tuesday when it released the 13th Global Wealth Report.

Global wealth per adult grew 8.4% to $87,489 and was up 11.3% excluding currency effects. In Switzerland, wealth per adult averages $696,000 (+3.7%), the highest level in the world.

However, when looking at median wealth per adult, Switzerland falls to 6th place at $168,080, an improvement of around $14,000 year-on-year. “Wealth per adult is high in Switzerland, particularly due to old-age provision,” explained Nanette Hechler-Fayd’herbe, Head of Investment for the Europe, Middle East and Africa region, on the fringes of the press conference.

“Analysis of average wealth within countries and around the world shows that global wealth inequality has declined this century due to accelerated growth in emerging markets,” argues economist Anthony Shorrocks, author of the report.

The study also highlights that the wealth share of the world’s top 1% increased for the second year in a row from 43.9% in 2019 to 45.6% in 2021. The Dollar Millionaires Club hosted 5.2 million additional members (+9%), increasing their membership to 62.5 million people worldwide.

Less wealthy in Switzerland

The number of ultra-high-net-worth individuals (UHNWI) grew by 21%, particularly in the United States and China. “In relatively few countries, the number of very wealthy people has declined,” notes Credit Suisse.

The largest decreases were recorded in Switzerland (down 120), Hong Kong (down 130), Turkey (down 330) and the United Kingdom (down 1130).

All regions of the world have seen improvements in the wealth of their residents, but North America and China have stood out in particular. The first region is responsible for half of the increase, with China for a quarter. Africa, Europe, India and Latin America together accounted for just 11.1% of the growth. “This figure reflects widespread depreciation against the US dollar in these regions,” the doubly-veiled bank said in a statement.

In terms of women’s wealth, Credit Suisse estimates that of the 26 countries representing 59% of the world’s adult population, 15 countries including China, India and Germany will see a decline in women’s wealth between 2020 and 2021.

Together with wealth, household debt rose by 4.4% worldwide.

The positive development of the equity markets in 2021 largely explains the strong growth in global wealth. In addition, exchange rate fluctuations are often the cause of significant gains and losses on assets valued in US dollars, the study’s authors note.

Slowdown 2022/2023

“Although 2022/2023 is likely to see some reversal of the unexpected wealth gains seen in 2021, as several countries face slowing growth or even recession, our five-year forecasts project wealth to continue to grow,” said Nanette Hechler-Fayd ‘tart.

Global inflation and the war in Ukraine could weigh on real wealth accumulation over the next few years, the study warns. However, global dollar assets are expected to fall by 36% through 2026, driven by momentum in low- and middle-income countries.

Wealth per adult is projected to grow 28% by 2026 and surpass $100,000 in 2024. The number of millionaires is expected to rise to 87 million and the very rich to 385,000.

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