UBS – Union Bank Switzerland – one of the world’s most important banks released its Global Wealth Report for 2023 (the 2022 figures) and there is some very bad news for both Israel and the U.S. The report showed that both countries saw wealth reduced in 2022.
The report was compiled by the Credit Suisse Research Institute (CSRI).
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For the first time since 2008 – the great recession began after the sub-prime housing market collapsed – UBS reported, global household wealth in US dollar terms decreased on aggregate as well as on a per adult basis, both in nominal and real terms. Wealth per adult also recorded the second-largest reduction since 2000. The 3.4% household wealth growth in 2022 was the lowest rate recorded in any year this century apart from 2008.
Measured in current nominal US Dollars, UBS found that globally total net private wealth fell by $11.3 trillion (–2.4%) to $454.4 trillion at the end of 2022. Wealth per adult also declined by $3,198 (–3.6%) to reach $84,718 per adult at end-2022. Much of this decline, explained UBS, came from the appreciation of the US dollar against many other currencies. If exchange rates are held constant at 2021 rates, then total wealth 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.
Along with the decline in aggregate wealth, UBS found that overall wealth inequality also fell in 2022, with the wealth share of the global top 1% falling to 44.5%. The number of USD millionaires worldwide fell by 3.5 million during 2022 to 59.4 million people before taking into account 4.4 million “inflation millionaires” who would no longer qualify if the millionaire threshold were adjusted for inflation in 2022.
Meanwhile, UBS said Global median wealth which is possibly a more meaningful indicator of the every day person’s wealth, did in fact rise by 3% in 2022 in contrast to the 3.6% fall in wealth per adult. For the world as a whole, median wealth has increased five-fold this century at roughly double the pace of wealth per adult, largely due to the rapid wealth growth in China.
As for Israel, the UBS Global Wealth Report found that the average wealth owned by Israeli adults contracted by $24,000 in 2022 to $235,000. But that was a lot less than many western nations. However, those nations started out with much higher GNPs and average citizen’s wealth.
While in other countries, for contrast, UBS found that average wealth rose in Singapore and Norway by more than $20,000. UBS said these increases are modest in comparison to losses that exceeded $40,000 in the Netherlands, Canada, Australia, New Zealand and Sweden. Each of these countries, the report said, previously experienced wealth growth in 2021, apart from the Netherlands. These reductions refer to nominal US dollars.
The UBS report also said that in real terms mean wealth fell by another 5.8%, so that the real losses in Denmark, the United States and Switzerland exceeded $50,000, the real losses in Canada and the Netherlands were above $60,000 and the real losses in Australia, New Zealand and Sweden were more than $80,000.
But the overall outlook since the start of the 21st Century is still rosy. UBS reported that, for the world as a whole, median wealth increased five-fold this century at roughly double the pace of wealth per adult.
