09/20/2022 | Press release | Distributed by Public on 09/20/2022 03:02
Further information
Imran Javaid
Credit Suisse
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Media Relations
Credit Suisse AG
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Wealth grew at a strong pace in 2021 and by year-end, global wealth at prevailing exchange rates totaled USD 463.6 trillion, a gain of 9.8%. Wealth per adult rose 8.4% to USD 87,489. Setting aside exchange rate movements, aggregate global wealth grew by 12.7% in 2021, which is the fastest annual rate ever recorded. However, factors such as inflation, rising interest rates, and declining asset price trends could reverse last year's impressive growth in 2022.
2021 was a bumper year for household wealth driven by widespread gains in share prices and a favorable environment created by central bank policies in 2020 to lower interest rates, but at the cost of inflationary pressures. Rises in interest rates in 2022 have already had an adverse impact on bond and share prices and are also likely to hamper investment in non-financial assets. Inflation and higher interest rates could slow household wealth growth in the near term even if nominal gross domestic product (GDP) rises at the relatively rapid pace predicted for this year.
Key highlights
Global wealth levels 2021
Figure 2: Percentage change in USD exchange rate, share prices and house prices, 2020
Wealth distribution 2021
The wealth share of the global top 1% rose for a second year running to reach 45.6% in 2021, up from 43.9% in 2019. US dollar millionaires gained 5.2 million extra members during 2021 and totaled 62.5 million worldwide at the year end. This 9% growth was slightly above the 8.4% increase recorded for wealth per adult, but fell short of the 9.5% rise in median wealth. The number of ultra-high-net-worth (UHNW) individuals expanded at a much faster rate, adding 21% new members in 2021. The United States (30,470) was the country that gained the most UNHW members, followed by China (5,200). UHNW membership also increased by more than a thousand in Germany (1,750), Canada (1,610) and Australia (1,350). Reductions in UHNW individuals were relatively uncommon. The biggest falls occurred in Switzerland (down 120), Hong Kong SAR (down 130), Turkey (down 330) and the United Kingdom (down 1,130).
An analysis of median wealth within countries and across the world shows that global wealth inequality has fallen this century due to faster growth achieved in emerging markets. Global median wealth has risen roughly twice as fast as global wealth per adult and much more rapidly than global GDP. The average household has thus been able to build up wealth over the last two decades.
Wealth outlook
Worldwide inflation and the Russia-Ukraine war are likely to hamper real wealth creation over the next few years. Nevertheless, global wealth in nominal US dollars is expected to increase by USD 169 trillion by 2026, a rise of 36%. Low and middle-income countries currently account for 24% of wealth, but will be responsible for 42% of wealth growth over the next five years. Middle-income countries will be the primary driver of global trends. Global wealth per adult is forecast to rise 28% by 2026 and to pass the threshold of USD 100,000 in 2024. The number of millionaires will also grow markedly over the next five years to 87 million, while the number of UHNWIs will reach 385,000.
Axel Lehmann, Chairman of the Board of Directors of Credit Suisse Group AG and Chair of the Credit Suisse Research Institute, said: "We are very proud to present the thirteenth edition of our Global Wealth Report. As a leading wealth manager, it is a prerequisite for us to have a deep understanding of private wealth developments and share these with our stakeholders to help them navigate the future. As inflation is dominating the current investment discourse, this year's study offers an additional assessment of real as opposed to nominal wealth trends to take account of the effect of inflation on global wealth."
Anthony Shorrocks, economist and report author, said: "On a country basis, the United States added the most household wealth in 2021, followed by China, Canada, India and Australia. Wealth losses were less common and almost always associated with currency depreciation against the US dollar. Analysis of median wealth within countries and across the world shows that global wealth inequality has fallen this century due to faster growth achieved in emerging markets. The average household has thus been able to build up wealth over the last two decades."
Nannette Hechler-Fayd'herbe, Chief Investment Officer for the EMEA region and Global Head of Economics & Research at Credit Suisse, said: "While some reversal of the exceptional wealth gains of 2021 is likely in 2022/2023 as several countries face slower growth or even recession, our five-year outlook is for wealth to continue growing. Higher inflation also yields higher forecast values for global wealth when expressed in current US dollars rather than real US dollars. Our forecast is that, by 2024, global wealth per adult should pass the USD 100,000 threshold and that the number of millionaires will exceed 87 million individuals over the next five years."
The Global Wealth Report 2022 is available at: www.credit-suisse.com/researchinstitute
About the Credit Suisse Research Institute
The Credit Suisse Research Institute is Credit Suisse's in-house think tank. The Institute was established in the aftermath of the 2008 financial crisis with the objective of studying long-term economic developments, which have - or promise to have - a global impact within and beyond the financial services. Further information about the Credit Suisse Research Institute can be found at www.credit-suisse.com/researchinstitute.
Credit Suisse
Credit Suisse is one of the world's leading financial services providers. The bank's strategy builds on its core strengths: its position as a leading wealth manager, its specialist investment banking and asset management capabilities and its strong presence in its home market of Switzerland. Credit Suisse seeks to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. The bank employs more than 50,000 people. The registered shares (CSGN) of Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.
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