Sunrise from Sky 100 Observation Deck in Hong Kong.
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Asia's ultra-high-net-worth population fell by about 10.9% last year, the world's largest regional decline, according to a report by data firm Altrata.
The report states that “Asia's ultra-high-net-worth population will decline by 11% in 2022 to 108,370 people, the highest of any region,'' and attributes the decline to China's severe coronavirus outbreak. It blamed the outbreak on the coronavirus lockdown, the war in Ukraine, and disruptions to regional supply chains.
High-tech markets such as South Korea and Taiwan bore the brunt of the export and consumption violations caused by the war, the global data firm said.
According to research, ultra-high net worth individuals (UHNW) are people with a net worth of more than $30 million.
According to the report, the total net worth of Asia's ultra-high-net-worth individuals is $12.13 trillion, compared to $11.73 trillion in Europe.
Europe was the second worst performing region, with the number of wealthy people falling by 7.1% to 100,850. The “direct consequences” of Russia's invasion of Ukraine were substantial, the report said.
The decline was fueled by an inflationary shock from Moscow as it leveraged the energy supplies Europe relies on, heightened risk aversion and supply chain disruptions.
India became one of the world's fastest growing economies in 2022, supporting a 3% increase in the ultra-high net worth population.
altrata
World Ultra Wealth Report 2023
The number of individuals in North America, the world's largest ultra-high-net-worth market with a total net worth of $16.47 trillion, fell 4% to 142,990, according to the report.
The report said the decline was primarily due to the US Federal Reserve's aggressive rate hike cycle. The Fed began an aggressive interest rate hike campaign in March 2022 as inflation rose to a 40-year high.
The number of ultra-high-net-worth individuals has increased significantly in the Middle East, Latin America, and the Caribbean. In the Middle East, the ultra-rich population increased by 15.7%, mainly due to higher commodity prices, and in Latin America and the Caribbean, it increased by 17.5%.
“The largest asset markets were all major commodity exporters, and the region's asset portfolio was supported by improved terms of trade due to rising prices,” the report said.
The top 10 countries listed in the report as home to the ultra-high-net-worth segment include the US, China and Hong Kong, but India was the only country where the number of ultra-high-net-worth individuals increased.
“India will be one of the world's fastest growing economies in 2022, which supported the 3% rise.” [in] India's economy grew 7.8% in the June quarter, the fastest pace of growth in a year.
Globally, the world's ultra-high-net-worth population fell by more than 5.4%, the first annual decline in four years.
“A generational spike in inflation has triggered aggressive monetary tightening for the first time in more than a decade,” Altrata said, adding that it has led to a reassessment of capital market risks and returns.
Despite recent fluctuations, Altrata expects the world's ultra-high-net-worth population to rise from 395,070 to 528,100 over the next five years, citing significant growth from Asia. North America is also expected to maintain its position as one of the world's ultra-rich regions.
