Global wealth increased 10.6% in 2021, creating a new record high of $530 trillion. Released by Boston Consulting Group on June 9, and as noted by Bloomberg, the increase was fueled by strong equity markets and an upsurge in real assets such as art, real estate, wine and watches.
The report, Global Wealth 2022: Standing Still Is Not an Option, highlights that despite the global challenges being faced at the moment, new wealth of approximately $80 trillion is still projected over the next five years.
“Wealth development is resoundingly resilient, and even against the backdrop of geopolitical turmoil the growth rate will remain positive,” said Anna Zakrzewski, global leader of BCG’s wealth management group.
Although wealth assets will continue to grow globally, Asia-Pacific is projected to maintain the fastest growth rates. Hong Kong specifically may replace Switzerland as the world’s largest booking center by 2022.
The Middle East and Africa, fueled by substantial energy holdings has a projected increase of 5.4% CAGR over the next five years. Western Europe and North America although crucial players are predicted to have slower wealth growth compared to previous years. Western Europe is projected to slow down from 4.5% to roughly less than 4% annually through 2026. North America, with a prior CAGR average of 9.1%, is projected at an estimated CAGR of 4.7% through 2026.
The report additionally noted the increased importance of Sustainable Investing, projected to represent potentially 17% of privately invested wealth by 2026, with growth three to five times as fast as more traditional investments.