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Allianz's Global Wealth Report reveals global financial assets fall, Asia shows resilience

EditorAmbhini Aishwarya
Published 09/26/2023, 08:21 AM
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On Tuesday, Allianz (ETR:ALVG) released the 14th edition of its Global Wealth Report, providing an in-depth analysis of the asset and debt situation of households across nearly 60 countries. The report highlighted a significant contraction in global financial assets during 2022, marking it as a particularly challenging year for savers.

According to the report, 2022 saw a 2.7% decline in private households' global financial assets, the most severe drop since the Global Financial Crisis in 2008. The fall resulted in the loss of financial assets worth €6.6 trillion (1 = $1.0608), with total financial assets amounting to €233 trillion at the end of 2022.

There were variations across different asset classes. Securities and insurance/pensions experienced significant setbacks at -7.3% and -4.6% respectively, while bank deposits demonstrated robust growth at +6.0%.

The decline was most pronounced in North America (-6.2%) and Western Europe (-4.8%). In contrast, Asia, excluding Japan, reported relatively strong growth rates despite the global downturn. China's financial assets exhibited robust growth as well at 6.9%, although this was a slowdown compared to the previous year's rate of +13.3% and the long-term average over the last 20 years (+15.9%). The report suggested repeated lockdowns contributed to this slower pace.

The report also shed light on the situation in Australia and Malaysia. Australian households experienced a decline of -1.3% in gross financial assets in 2022; however, securities and bank deposits showed solid growth rates of 4.0% and 8.5% respectively. Malaysian households saw a slight increase in gross financial assets by 1.0% in 2022, with insurance/pension and bank deposits recording modest growth.

Ludovic Subran, chief economist of Allianz, highlighted inflation as a significant challenge for savers. Michaela Grimm, co-author of the report, gave a mixed mid-term outlook, expecting average growth of financial assets to hover between 4% and 5% over the next three years amidst a volatile market environment.

On the liabilities side, global private debt growth slowed to 5.7% in 2022 from 7.8% in 2021. The global debt-to-GDP ratio fell by more than 2pp to 66.1% in 2022, marking a return to levels seen at the start of the millennium.

The report concluded with an expectation of global financial assets returning to growth in 2023, supported primarily by positive developments on the stock markets. However, it warned that savers should brace for another year of real losses on their financial assets given an anticipated global inflation rate of around 6% in 2023.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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