WHO ? WHERE ? AND HOW ? OF WEALTH CREATION THIS YEAR GLOBALLY ……. sudhanshu

WHO ? WHERE ? AND HOW ? ?OF WEALTH CREATION THIS YEAR GLOBALLY …….

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This is an excerpt from Report on Wealth Creation globally prepared by Research Team at? GLOBAL ECONOMIC ASSOCIATION a Economic Intelligence unit based in ?Washington DC of which I was a Member. Sharing the glimpse of ?the findings for information. ?

?The world has been getting progressively richer across all wealth segments

Last year, global wealth rebounded from its 2022 slump. Wealth is steadily growing throughout the world – albeit at different speeds – with very few exceptions. The proportion of people in the world in the lowest wealth bracket has shrunk since 2008, while the proportion of people in every other wealth bracket has grown.

?The percentage of adults in that lowest wealth band, below USD 10,000, nearly halved between the year 2000 and 2023. Most of these people moved up into the considerably wider second band, situated between USD 10,000 and USD 100,000, which more than doubled. And people are now three times as likely to have wealth exceeding USD 1 million.

Wealth mobility has been more likely to be upward than downward

??Our analysis of household wealth over the past 30 years shows that a substantial share of people in our sample markets move between wealth brackets in their lifetime.

?In every wealth band and over any time horizon, it’s consistently likelier for people to climb up the wealth ladder than slip down it. In fact, our analysis shows about one in three individuals moves into a higher wealth band within a decade. And, while extreme movements up and down the ladder are uncommon, they are not unheard of. Even leaps from the bottom to the top are a reality for a part of the population. The likelihood of getting richer tends to decrease over time, however. Our analysis shows the longer it takes adults to gain appreciably in wealth, the slower the increase tends to be in future years.

??A great horizontal wealth transfer is under way

In many couples, one partner is younger than the other, and generally speaking, women outlive men by just over four years on average, irrespective of a given region’s average life expectancy. This means that intra-generational inheritance often comes before inter-generational wealth transfer. As our analysis shows, the inheriting spouse can be expected to hold on to this wealth for four years on average before passing it on to the next generation.

?Our analysis also shows that USD 83.5 trillion of wealth will be transferred within the next 20–25 years. We estimate USD 9 trillion of this will be shifted horizontally between spouses, the majority in the Americas. Over 10% of the total USD 83.5 trillion is likely to be transferred to the next generation by women.

The number of millionaires is on track to keep growing

?In 2023, millionaires already accounted for 1.5% of the adult population we analyzed. The United States had the highest number, at nearly 22 million people (or 38% of the total). Mainland China was in second place with just over six million – roughly double the number of the United Kingdom, which came third.

?By 2028, the number of adults with wealth of over USD one million will have risen in 52 of the 56 markets in our sample, according to our estimates. In at least one market – Taiwan – this increase may reach 50%. Two notable exceptions are expected to be the United Kingdom and the Netherlands.

The regional dimension

The wealth bounce-back is powered by Europe, Middle East and Africa

This rebound was led most strongly by growth in Europe, the Middle East and Africa (EMEA). Notably, while the global downturn in wealth in 2022 was mostly caused by the strength of the US dollar, last year wealth bounced back above 2021 levels, even when measured in local currencies.

?Since 2008, wealth has grown fastest in Asia-Pacific – apparently fueled by debt

Wealth in Asia-Pacific has grown the most – by nearly 177% – since we published our first Global Wealth Report fifteen years ago. The Americas come in second, at nearly 146%, while EMEA lags far behind at just under 44%.

?Asia-Pacific’s exceptional growth in both financial and non-financial wealth has, notably, been accompanied by a significant spike in debt. Total debt in this region has grown by over 192% since 2008 – more than twenty times than in EMEA and more than four times than in the Americas.

US wealth continues to be buoyant

The USA is one of very few markets in our sample where wealth growth has accelerated since 2010 compared with the decade before. In the US, as in the United Kingdom, wealth has grown evenly across all wealth brackets.

Our analysis shows inequality in wealth has fallen slightly in the US since 2008; in 2023 it was home to the highest number of USD millionaires.

LatAm growth is strong, but inequality is ever present

Brazil’s average wealth per adult has grown by over 375% since the financial crisis of 2008, when measured in local currency. This is more than double Mexico’s growth of just over 150% and more than Mainland China’s 366%. However Brazil has the third-highest rate of wealth inequality in our sample of 56 countries, behind Russia and South Africa.

Adults in EMEA are the wealthiest on average, but their wealth is growing the slowest

?EMEA enjoys the highest wealth per adult in US dollar terms, at just over USD 166,000, followed by APAC, with slightly over USD 156,000, and the Americas, with USD 146,000.

?Growth in average wealth per adult since 2008, expressed in USD, shows a different picture: EMEA comes bottom with 41%, compared with 110% in the Americas and 122% in APAC.