World’s Wealthiest Individuals Lose 10 Trillion USD Of Their Combined Wealth, Europe Takes The Major Hit
The 218,000 individuals, who were called “ultra-high net worth individuals” have showcased a 10 percent decline in their overall fortune from 101.5 trillion USD in 2021 to 91.4 trillion USD in 2022.
The world’s wealthiest men lost a valuation of 10 trillion USD in the last year. The loss has contributed to triple shocks, including geopolitical crises, energy, and extreme economic volatility in the global economy.
The 218,000 individuals, who were called “ultra-high net worth individuals”, have showcased a 10 percent decline in their overall fortune from 101.5 trillion USD in 2021 to 91.4 trillion USD in 2022. The data has been sourced from Knight Fraks wealth report published recently. The decline has been recorded as the biggest in the fortune of super-rich individuals since the annual study that was first published in 2010.
The head of the research and the editor-in-chief of the wealth report has stated that wealthy individuals suffered the biggest shock after they gained profits over the years. The Ukraine crisis has caused the European energy crunch and increased persistent inflation.
He has stated that it could be a reason behind the loss of the wealth of the richest individuals. Furthermore, 2022 has demonstrated one of the increasing movements in the global interest rates in history, leading to an economic condition that could be called a permacrisis.
The report has stated that four in every ten Ultra- high net worth individuals – defined as people having a net worth of at least 30 million USD, including their residence, had increased their fortune in the last year. The trend was overwhelmingly negative for many individuals.
The study has indicated that the worth of the residential property, investments for commercial properties, fixed income, and investments for passion have declined.
The fall in wealth could be attributed to the monetary policy that has resulted in the worst performance for the portfolio since the 1930s.
The combined wealth of the world’s wealthiest individuals has plummeted by 10 percent; Europe takes the major blowout:
Europeans have experienced a blowout in wealth by 17 percent. It has been followed by Oceania, which has experienced a decline in wealth by 11 percent and that of Americans reaching 10 percent. Asia and Africa have demonstrated the smallest decline in wealth, contributing to 5 and 7 percent respectively.
Wealthy individuals are still investing in luxurious homes despite the decline in wealth. Records have shown that in New York and London, 43 homes changed hands for a valuation worth more than 25 million USD in the last year. It indicates a 26 percent sales in the ultra-prime threshold in London. At the same time, it showcases a 35 percent drop in sales in New York. Los Angeles was in the third position with 39 sales, followed by Hong Kong with 28 sales and Miami with 23.
The world’s wealthiest individuals have been moving forward with luxurious homes despite the headwinds in the global economy. London and New York have been prime locations for housing. A slowdown in high-end sales is predicted in the present scenario. However, the reopening of China and the ongoing appetite for lifestyle-related purchases will drive the economy.
Russia has followed the same trajectory. The 23 Russian billionaires, who were on the list of the 500 wealthiest people, had a combined net worth accumulating to 339 billion USD before the day Putin’s forces invaded Ukraine.
A year later, Russia’s prominent wealthy individuals lost 67 billion USD from their fortunes. The decline has been considered a 20 percent drop that is considered four times as large as Bloomberg’s Billionaires Index.
The crucial reason for the decline in their wealth could be attributed to the sanctions imposed in Russia the last year. It has further eroded the individual’s fortune.
Roman Abramovich was forced to put his prized London possessions for sale. Recently, many US authorities have been looking for art brought or sold by ultra-rich Russian individuals.
At present, the US economy is in good shape because consumer spending is surging. The report from the United States Department of Commerce has stated that the economy is not in fear of recession. The data has shown robust job growth and the lowest rate of unemployment in 53 years. Consumer spending increased by 1.8 percent last month and is considered the largest increase since March 2021. Consumers have boosted the purchase of long-lasting manufacturing goods, including household furnishings, etc.
The spending has increased by the hike in wages by 0.9 percent.
Edited by Prakriti Arora