Gains in global personal wealth ground to a near-halt in 2018, rising just 1.6 per cent for the weakest growth in five years. The slowdown is a steep drop from the 7.5 per cent gain in personal global wealth in 2017, and the 6.2 per cent compound annual growth rate from 2013-17, according to an analysis by Boston Consulting Group.
Factor in the effect of a rebounding US dollar and asset values actually declined 1.6 per cent last year, wiping out any gain, said Anna Zakrzewski, global leader of BCG’s wealth-management practice. “For the first time since 2008, we saw wealth growth was negative when you take into account all the factors,” she said.
Still, the amount of personal financial wealth sloshing around the world remains enormous — $206 trillion. Although overall growth was down, some regions did well. Increases ranged from 8.9 per cent and 7.1 per cent for Africa and Asia, respectively, to anaemic gains of 0.6 per cent for Western Europe and 0.4 per cent for North America.
The ranks of millionaires continued to swell, increasing 2.1 per cent in 2018 to 22.1 million. BCG estimates that by 2023 there will be 27.6 million globally. Switzerland boasts the greatest density of millionaires among its adult population at 7.5 per cent, followed by the US.
From 2018-23, the global ultra-high net worth crowd will see the fastest increase in their personal wealth, with a compound annual growth rate of 7.8 per cent, BCG projects. The group represents 7 per cent of total wealth, according to BCG, as does the next lower wealth tier — those with $20 million to $100 million.
Over the next five years, China will account for roughly one-third of the flows into offshore financial centers, with most of it likely to end up in Hong Kong and Singapore, Zakrzewski said.
The two cities, and perhaps the US and UAE, “have the strongest exposure to growth markets as offshore financial centers,” and should expand at annual compound rates of 7-8 per cent.