Financial markets rallied last year after a dip in 2022, boosting global net wealth by more than 4%. Growth in Western Europe was slightly more subdued in terms of financial wealth.
ADVERTISEMENTThe value of assets across the globe grew to $477 trillion (€441 trillion) in 2023, according to this year's global wealth report from Boston Consulting Group (BCG).
That's a jump of 4.3%, a figure driven higher by a rebound in financial wealth, which rose by almost 7%.
Financial wealth, a sub-section of overall wealth, excludes real assets such as property and land, as well as liabilities.
These insights come as a positive sign following a rocky post-covid period, when high interest rates and currency depreciation hit pockets across the globe.
In 2022, total wealth rose only 0.2%, while financial wealth saw a 4% drop.
Even so, BCG noted that a full recovery has not yet been achieved. A total wealth rise of 4.3% is still modest compared with an average annual growth rate of 7.1%, achieved from 2014 to 2021.
How are different regions faring?
Looking at the period from 2022 to 2023, the annual rate of growth for net wealth was highest in Latin America (7.9%), followed by the Middle East and Africa (7.8%).
When compared with the predicted annual growth rate for 2023 to 2028, the Middle East and Africa comes out on top (10%), followed by Latin America.
Despite experiencing more dramatic increases, this doesn't mean these regions are the wealthiest.
On the contrary, riches are overwhelmingly concentrated in North America, followed by the Asia-Pacific area, and then Western Europe.
"Financial wealth in the developed economies of North America and Western Europe took a particularly hard hit in 2022, but both regions bounced back in 2023," said BCG.
"North America was among the fastest-growing regions, accounting for more than 50% of all new financial wealth in 2023, propelled by an enormous recovery in the stock market."
Financial gains were notably boosted by tech and semiconductor shares, with Apple, Nvidia, and Microsoft becoming the first companies to reach market capitalisations in the $3 trillion (€2.77 trillion) range.
Growth in Western Europe was slightly more subdued in terms of financial wealth. According to BCG, this was not only down to smaller stock market gains, but investors also put less of their money into shares.
Financial wealth similarly showed subdued momentum in the Asia-Pacific region, rising 5.1% in 2023. The report suggested this was primarily due to a slowdown in wealth creation in China, although robust growth is expected in the period to 2028.
ADVERTISEMENTWealth rises aren't evenly spread within regions
To focus on data from individual countries, it's helpful to look at a parallel Global Wealth Report from UBS, also released on Wednesday.
One section of the study, which focuses on 56 countries, looks at the average growth in wealth per adult from 2022 to 2023.
The strongest contraction was noted in Cyprus, with a slump of more than 30%. Mexico followed in the rankings, where wealth per population was down near 20%. Kazakhstan was next, recording a contraction more than 17%.
Among Western European economies, Switzerland and Italy fared the worst, with declines of almost 6% and 4% respectively.
ADVERTISEMENTAt the other end of the scale, Turkey stands out with a rise of more than 157% in wealth per adult between 2022 and 2023, leaving all other nations far behind.
The UK saw this figure grow close to 10% on the year, while Denmark's wealth per adult increased by almost 6%.
UBS also collected data on the distribution of millionaires across the globe, a headcount that is set to increase over the coming years.
Most of these individuals are in the US, followed by mainland China, and then the United Kingdom.
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