According to the UBS annual wealth report, global wealth saw its first decline since the 2008 financial crisis, resulting in over 3.5 million individuals losing their “dollar millionaire” status in the past year. The number of adults with assets exceeding $1 million dropped from 62.9 million in 2021 to 59.4 million in 2022. The Swiss bank attributed this decrease to high inflation and the devaluation of many currencies against the dollar.
While the United States experienced a decline of 1.8 million millionaires, it still possesses the largest number of millionaires compared to any other country. China trailed closely behind with 6.2 million millionaires. However, despite the decrease, the report highlights that the number of millionaires worldwide has quadrupled since the turn of the century.
The United Kingdom witnessed the third-largest decline in millionaires, with a decrease of 440,000 individuals, bringing the total to 2.6 million. Japan and Australia had the second and fourth-largest declines, respectively. At the highest echelon, the number of people with assets exceeding $50 million fell by 22,500 to 243,000.
According to research conducted for the Bloomberg billionaires index, the world’s wealthiest 500 individuals experienced a combined loss of $1.4 trillion in 2022. Notably, Elon Musk, the richest person globally and co-founder of Tesla, lost $138 billion, coinciding with his $44 billion acquisition of Twitter. Facebook co-founder Mark Zuckerberg also suffered a significant decline in net worth, losing nearly $81 billion, leaving him with $45 billion at the end of 2022.
UBS economists observed that the decline in wealth impacted the super-rich, as well as individuals with moderate and low incomes. This marks the first decrease in net global household wealth since the 2008 financial crisis. Privately held wealth worldwide contracted by $11.3 trillion, equivalent to a 2.4% decline, reaching a total of $454 trillion. The average wealth per adult decreased by $3,200 to $84,718, signifying a departure from the consistent expansion of household wealth seen throughout this century.
UBS economists also noted that the impact of this decline in wealth would be more pronounced when considering the surge in global inflation, which has put pressure on household finances due to increased costs of essential goods, including food and energy. Additionally, the rapid advancements in technology and automation, referred to as the “fourth industrial revolution,” are causing significant disruptions and transformations in economies worldwide.
Paul Donovan, the chief economist at UBS, emphasized the profound economic changes occurring on a global scale, stating that the fourth industrial revolution represents the most substantial structural upheaval in 250 years. He added that beyond economic shifts, this revolution would challenge social and economic relationships.
The report indicates a slight reduction in wealth inequality, with the proportion of the world’s wealth held by the richest 1% declining to 44.5%. This marks a reversal of the wealth inequality trend that emerged during the COVID-19 pandemic. To be classified within the top 1%, individuals must possess assets exceeding $1,081,342.
In the UBS report from 2018, it was revealed that billionaires saw a historic increase in wealth during 2017, with their combined wealth rising by a fifth to reach $8.9 trillion.
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