The average wealth for an Israeli adult in 2021 jumped by 17.6% and amounted to 273.5 thousand dollars – a figure that places Israel among the six largest earners in the world – according to the annual global wealth report of the Credit Suisse Research Institute (CSRI).
The rate of global wealth, according to a report, stood at 463.6 trillion dollars in 2021, an increase of 9.8% compared to 2020. The wealth per adult grew by 8.4% and stood at 87,789 dollars. Adjusted for exchange rate fluctuations, total accumulated wealth in 2021 grew by 12.7%, the fastest annual growth ever. However, the positive trend may reverse this year due to inflation, rising interest rates and the downward trends in asset prices.
In 2020, the policy of the central banks was to lower interest rates, and this policy is one of the reasons for the growth in household wealth in 2021, because the low interest rate encouraged investment. The increases in interest rates in 2022 are already having a negative impact on bond and stock prices and are also expected to damage investments in non-financial assets. Inflation and higher interest rates may slow down the growth in household wealth in the near future.
The North American region contributed slightly more than half of the total global growth and China added another quarter. In contrast, Africa, Europe, India and Latin America together contributed only 11.1% to the increase in global wealth.
In addition, in 2021 it can be seen that a combination of the significant increase in GNP and the capital and housing markets produced significant increases in wealth at the country level. For example, the United States added $19.5 trillion to its household wealth. However, in 2022, property prices fell, and Expect a recession or a partial reversal of the trend from last year.
The millionaires’ club, according to value in dollars, grew by 9% in 2021, and in numbers, about 5.2 million new members were added to it, so that their total number in the world at the end of the year was 62.5 million.
The forecast for the next five years: growth, despite inflation
Global inflation and the war between Russia and Ukraine are expected to harm the creation of real wealth in the coming years.
Today, low and middle income countries hold 24% of the wealth, but according to Credit Suisse’s forecast, in the next five years they would be responsible for 42% of the growth. Global wealth per adult is expected to grow by 28% by 2026 and cross the $100,000 mark in 2024. The number of millionaires will also increase in the next five years and is expected to reach 87 million.
Nanette Hähler-Feide’Harbe, Chief Investment Officer for Europe, the Middle East and Africa and Head of Economics and Research at Credit Suisse, said: “Our forecast for the next five years is that wealth will continue to grow. Higher inflation also results in higher predicted values for the current global wealth value compared to its real value in US dollars”.