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SINGAPORE: Global household wealth went into decline in 2022 but Singapore managed to buck the trend.
A new report noted that household wealth here rose 7.2% in 2022 to US$1.91 trillion, while the average household increased its financial standing by 6.3% on a per adult basis.
The annual report by Swiss banks UBS and Credit Suisse uses the US dollar to make it easy to compare different economies.
Singapore’s rising wealth defies global trends, which indicate that total net household wealth dropped 2.4% to US$454.4 trillion in 2022, while the wealth per adult declined 3.6%.
Singapore also fared well when compared with Asia’s big two – China and India.
China posted declines in both total and average wealth per adult, while India saw a 4.6% increase in total household wealth and a 2.8% lift in wealth per adult.
Anthony Shorrocks, economist and author of the report, said that much of the decline in global wealth – the first since the 2008 financial crisis – was due to inflation and the strength of the US dollar against other currencies.
Shorrocks added that financial assets like stocks and currency deposits contributed most to global wealth declines, while non-financial ones like property stayed resilient amid high interest rates.
But he warned that non-financial assets could hit global wealth this year if house prices start to fall.
The study, now in its 14th year, covers 5.4 billion adults around the world and across the wealth spectrum – from billionaires to the middle and lower-income levels.
It found that median wealth per Singapore adult – this takes the middle number in the whole database – rose 6.2% from 2021 to US$99,488.
Median wealth per adult was up 3% globally but down 4.4% in China and up 2.7% in India.
Median wealth is a “more meaningful indicator of how the typical person is faring”, the report noted.
This is because unlike average wealth, it is not influenced by outliers – households that either have very high incomes or very low ones.
Singapore’s Gini coefficient, a measure of economic inequality, was 78.8% in 2022, lower than the world level of 88.3% and India’s 82.5% but higher than China’s 70.9%.
A higher Gini coefficient indicates greater inequality, while a lower one means wealth is more evenly spread across the population.
There were 332,000 millionaires in Singapore in 2022, up 10.3% from 2021, but the global number fell to 59.4 million.
The report forecast that global wealth will rise by 38% over the next five years, while average wealth per adult will increase by 30% to US$110,270.
Meanwhile, a separate report found that affluent investors in Singapore were more optimistic about their prospects than peers in Hong Kong, India, mainland China and the United Arab Emirates.
The Bloomberg Media study, which surveyed around 600 affluent investors in these markets, found that 87% of those polled in Singapore said their net worth had increased over the past three years, more than in the other markets.
Around 50% of Singapore investors believe there is an opportunity to focus on long-term wealth creation now, despite global market volatility, making them more optimistic than those in other markets, which were around 37%.
They also feel better prepared for retirement than affluent investors in other markets, with 94% saying they are somewhat prepared or extremely well-prepared, compared with only 85% elsewhere. — The Straits Times/ANN
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