Over 3.5 million people lost their millionaire status last year, the biggest decline in global wealth since the financial crisis of 2008, revealed the UBS annual wealth report. The number of people with assets worth $1 million or more fell from 62.9 million at the end of 2021 to 59.4 million by the end of last year.
Global wealth has been hit by high inflation and the decline in various currencies around the world, the Swiss Bank added. However, despite the drop in the number of millionaires last year, there were four times more millionaires than there were at the turn of the century
While the number of millionaires in the US dropped by 1.8 million to 22.7 million last year, it was still more than any other country. China sat at number two on the list of countries with the most millionaires with a count of 6.2 million. The number of millionaires in the UK, which has been battling several economic challenges, fell by 4,40,000 to 2.6 million, recording the third biggest fall. The number of millionaires in Japan, fell from 3.2 million to 2.6 million making it the third biggest drop in the list.
“The global economy is experiencing a period of astonishing economic alteration. The sweeping changes of the fourth industrial revolution represent the most dramatic structural upheaval in 250 years. Revolutions, it turns out, are revolutionary, social as well as economic relationships will be challenged by this process,” Paul Donovan, chief economist at UBS, was quoted as saying in the report.
While most countries battled a decline in the number of millionaires, there were exceptions to this trend as well. Countries like Russia, Mexico, India and Brazil witnessed an increase in wealth.
The drop in overall wealth also led to a decline in wealth inequality. The wealth share of the top 1 % fell to 44.5 % last year. The global median wealth, used to determine individual income, increased by 3 % in 2022 compared to a 3.6% fall in wealth per adult.
The report projected a positive trend for the coming year, suggesting a rise of 38 per cent in global wealth in the next five years to reach $629 trillion by 2027. The wealth growth in the upcoming years is set to be driven by middle-income countries, the report added.
According to the UBS report, the number of millionaires is expected to reach 86 million with the number of ultra-high-net-worth individuals (UHNWIs) likely to rise to 3,72,000 individuals by 2027.
