Global economic uncertainty, inflation, rising interest rates, trade issues, stock market fluctuation, demographic shifts, and technological changes have all had a major impact on global wealth growth, significantly slowing it down in the past decade compared to the one before.
According to data presented by Stocklytics.com, the global wealth growth rate has practically halved in the past decade, falling to only 4.5%.
According to the UBS 2024 Global Wealth Report, global wealth growth has significantly cooled compared to the previous decade. Between 2000 and 2010, the average annual growth was 7%. However, this figure has plunged to only 4% from 2010 onwards. Although wealth growth is far from uniform, most surveyed countries saw a similar decline.
In the first decade of the millennium, over half of the markets saw their wealth grow in the double digits when measured in U.S. dollars. But since then, not even one comes close to 10%.
For instance, in Mainland China and India, the average annual wealth growth has more than halved since 2010, falling from 19% to 8% and 14% to 7%, respectively. Russia saw an even more alarming decline, with its wealth growth rate plummeting five times from 20% to 4%.
It’s similar in Australia, the United Arab Emirates, and Brazil, where annual wealth growth has dropped by over two-thirds. Germany saw its growth rate halve from 6% to 3% decade-over-decade, while the United Kingdom was far behind with only a 1% drop.
Statistics also show the United States and Hong Kong were the only two among the 56 surveyed markets defying this negative trend. Between 2000 and 2010, the average wealth growth rate in the U.S. was 4%. Since then, this figure has increased to 6%, largely due to the U.S. being the epicentre of the global financial crisis. The crisis had a negative impact on house prices, the main asset most people own, which in turn affected the overall wealth growth. Hong Kong saw its growth rate increase by 1% decade-over-decade.
While none of the surveyed countries experienced negative average annual wealth growth between 2000 and 2010, that changed in the second decade. Between 2000 and 2010, Spain and Italy saw 12% and 7% wealth growth rates, respectively. Since then, these figures have plunged to zero. Greece and Japan reported even more worrying figures, with their growth rates falling from 7% and 4% to -2 %.
Although there are many causes behind these declines, demographics undoubtedly played a huge role in the slowdown seen in Japan and Italy, with their shrinking populations and ageing societies reducing economic activity.
