Private wealth grew strongly in 2021, but so far this year has been a challenging one. Even so, the number of millionaires will increase sharply within the next few years, says Credit Suisse.
Global household wealth showed robust growth in 2021, but this year, inflation, rising interest rates, financial turmoil, and the war in Ukraine could lead to setbacks in wealth growth this year. And while forecast uncertainty is currently greater than usual given the prevailing uncertainties, Credit Suisse remains confident in its outlook for global wealth.
Credit Suisse projects that global private wealth will increase by 36 percent, or $169 trillion, by 2026, and in the process increase wealth per adult by 28 percent. Another milestone is that by 2024, global wealth per adult will cross the $100,000 threshold, Nannette Hechler-Fayd'herbe, chief investment officer for the EMEA, and global head of economics & research at Credit Suisse elaborated at Tuesday's presentation of the firm's «Global Wealth Report 2022».
An Exceptional Year
At the end of 2021, global household wealth stood at $463.6 trillion, an increase of $41.5 trillion, or 9.8 percent, from the previous year, in which adults saw their assets grow 8.4 percent to $87,489.
On a constant exchange rate basis, total wealth actually increased 12.7 percent, and wealth per adult by 11.3 percent. In light of that «2021 must be considered an exceptional year that is unlikely to be repeated in the near future,» said Anthony Shorrocks, economist and author of the report.
Swiss Wealth
With an average wealth of $696,600 per adult, Switzerland topped the wealth rankings in 2021, followed by the United States, Hong Kong, Australia, and New Zealand. A different picture emerges when the median is used as a yardstick. Switzerland then falls to sixth place with $168,000 per adult. In this analysis, Australia is at the top, ahead of Belgium and New Zealand.
More and More Rich People
Hechler-Fayd'herbe goes on to predict the number of millionaires will exceed 87 million people in the next five years. In 2021, 62.5 million people had assets of at least $1 million.
Among the ultra-rich with assets over $50 million (UNHWI), Credit Suisse expects the number to increase to 385,000, up from 264,200 at year-end 2021. More than half of all UHNWI currently reside in North America, while Asia-Pacific countries, including China and India, are home to over 67,000 super-rich.
US Leads but China Closing in
The US remains atop of the ranking of countries with the most millionaires with a clear lead over second-placed China. In 2021 alone, the number of new US millionaires grew by around 2.5 million people, representing nearly half of the global increase of 5.2 million people. Switzerland counted 113,000 more millionaires at the turn of the year for a total of around 1.2 million.
But the supremacy of the US will erode, according to Credit Suisse analysis. In view of limited GDP growth and the possibility that asset prices will fall again after peaking at the end of 2021, Credit Suisse expects the number of US millionaires to increase by «only» 13 percent over the next five years. In emerging markets, the number of millionaires will grow faster, with the number of millionaires in China almost doubling to around 12.2 million by 2026.
