Furthermore, by 2027, the average adult will be worth $110,270, with 86 million millionaires as global wealth increases.
Meanwhile, 372,000 ultra-high net worth individuals (UHNWIs) are also expected.
This is according to the fourteenth Global Wealth Report, now jointly published by Credit Suisse and UBS.
It also states that by the end of 2022, total net private wealth had decreased by $11.3trn (-2.4%), to $454.4trn, assessed in current nominal USD.
In addition, wealth per adult dropped by USD 3,198 (-3.6%) to USD 84,718 per adult.
The rising value of the US dollar against several other currencies accounts for a large portion of this reduction.
Financial assets were the most responsible for wealth reductions in 2022, while non-financial assets (mostly real estate) remained stable despite rapidly rising interest rates.
In terms of demographics, Generation X and Millennials performed effectively in the United States and Canada in 2022, but they were not immune to the general wealth drop.
Non-Hispanic Caucasians in the United States had their wealth decline in 2022, while African Americans were largely unaffected by the slump.
Hispanics, on the other hand, experienced 9.5% increase in 2022, owing to their stronger ownership of housing assets over financial assets.
Reduction of wealth gaps
In 2022, global wealth inequality also decreased, with the wealth share of the top 1% falling to 44.5%, parallel to the loss in total wealth.
Globally, there were 59.4 million millionaires in 2022, a decrease of 3.5 million.
However, 4.4 million “inflation millionaires” who would no longer be eligible if the millionaire threshold were changed for inflation in 2022 are not included in this number.
Contrary to the 3.6% decline in wealth per adult, the global median wealth, did rise by 3% in 2022.
Globally, median wealth has expanded fivefold this century, approximately doubling the rate of wealth per adult, owing partly to China’s strong wealth growth.
Iqbal Khan, President Global Wealth Management at UBS, said: “This year’s Global Wealth Report reveals valuable insights about the state of our economy and society, as well as the shifting meaning and potential of prosperity. This sweeping analysis of household wealth covers the estimated wealth holdings of 5.4 billion adults around the world and across the wealth spectrum. It looks to future trends, helping us to frame expectations, understand the ever-changing nature of wealth creation, and better conceive of the power of wealth to broadly benefit our society.”
Anthony Shorrocks, economist, and report author added: “Much of the decline in wealth in 2022 was driven by high inflation and the appreciation of the US dollar against many other currencies. If exchange rates were held constant at 2021 rates, then total wealth would have increased by 3.4% and wealth per adult by 2.2% during 2022. This is still the slowest increase of wealth at constant exchange rates since 2008. Keeping exchange rates constant but counting the effects of inflation results in a real wealth loss of –2.6% in 2022. Similarly, financial assets contributed most to wealth declines while non-financial assets (mostly real estate) stayed resilient, despite rapidly rising interest rates. But the relative contributions of financial and non-financial assets may reverse in 2023 if house prices decline in response to higher interest rates.”