Global wealth will shrink by more than 2% this year, Allianz says | Job Binary

According to an Allianz report, global household wealth is on track for its first significant decline since the Great Financial Crisis of 2008.

In a global wealth report published on Wednesday, researchers said the value of household financial assets could lead to a nominal decline of more than two percent in 2022 after three years of record growth. They called the year a “tipping point” for global wealth, but significant reversals would follow.

“Monetary tightening is squeezing economies and markets – with household wealth feeling the pinch,” Allianz said in a report. “In real terms, households lose a tenth of their wealth.”

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Russia’s war on Ukraine has stifled the post-pandemic economic recovery and sent food and energy prices soaring, forcing central banks around the world to raise borrowing costs.

Many stock markets are likely to end the year “in the red,” Allianz said, adding that it was unclear whether recent interest in equities as an asset class would prevail amid lower earnings in some parts of the world.

“Compared to the great financial crisis, it was followed by a relatively rapid turnover, especially in the asset market – this time the medium-term forecast is also bleak: moderate growth of financial assets is expected. Compared to 10.4 percent in the previous three years, it should be 4.6 percent by 2025,” the report said.

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