Global Wealth Takes a Hit: A Comprehensive Analysis

Global Wealth Takes a Hit: A Comprehensive Analysis

Global Wealth Decrease: The First Since 2008

The world has recently seen a substantial decrease in global wealth, the largest since the 2008 financial crisis. The ‘Global Wealth Report 2023’, released by Allianz, shows that worldwide wealth decreased by 2.7%, amounting to a total of 233 trillion euros by the end of 2022.

Switzerland: The Wealthiest Nation Per Capita

Despite the overall decrease in wealth, Switzerland remains the wealthiest nation per capita. Even with a decline in wealth, Swiss citizens’ gross wealth amounts to 356,310 euros per person, equivalent to nearly 345,000 Swiss francs. This places them as the richest people globally. Other countries following this lead, in terms of gross wealth per person, are the US (307,940 euros), Denmark (220,730 euros), Singapore (193,660 euros), and Canada (170,400 euros).

Asset Class Performance: Bank Deposits, Insurance and Securities

Interestingly, amidst the overall wealth decline, two major asset classes saw an increase. Bank deposits and insurance or pensions experienced growths of about 2% and 3% respectively. However, these increases were not sufficient to counterbalance the 12% value loss experienced by the largest asset class, securities.

The Net Wealth of Swiss Citizens

Swiss citizens also saw an increase in debt by 2.9%, resulting in a 4.4% decrease in net wealth per person, which now stands at 238,780 euros (231,000 Swiss francs). However, despite this decline, Switzerland still ranks second after the US (253,450 euros) in terms of net wealth per person.

Changes in Swiss Households’ Saving Behavior

Over the years, Swiss households’ saving behavior has undergone significant changes. Though bank deposits increased considerably last year (inflows of 23.5 billion euros), they still remain behind securities (40.6 billion euros) and insurance/pensions (26.6 billion euros). Over the past three years, fresh money inflow into bank deposits amounted to 60.4 billion euros, while securities purchases were more than double at 135.6 billion euros. This indicates a rediscovery of the capital market by Swiss savers.

Global Wealth Forecast for 2027

Despite the recent decline, the 2023 Global Wealth Report predicts that by 2027, global wealth is expected to reach 629 trillion euros, a 38% increase. This projection holds even though 2022 was the first year to show a decrease since 2008, with a drop of 2.8% or 11.3 trillion euros. The United States leads the list of market losses in 2022, followed by Japan, China, Canada, and Australia. However, global median wealth rose by 3% in 2022 compared to the 3.6% decline in wealth per adult.

Conclusion

The global wealth landscape is constantly changing, influenced by various factors such as economic conditions, market performance, and changing consumer behaviors. The recent decrease in global wealth is a significant event, marking the first decline since the 2008 financial crisis. However, with projections for wealth increase by 2027, the future years could see a turnaround in this trend.