A recent UBS Global Wealth report reveals that global wealth increased by 4.2% in 2023. However, the report also indicates a deceleration in the rate at which individuals are accumulating wealth. To shed light on this trend, UBS Global Wealth Management chief economist Paul Donovan offers his examination.
Donovan explains that the primary factor behind this slowdown is the natural progression of economic development. As populations transition from low or middle-earnings status to higher earnings brackets, “naturally the pace of wealth accumulation is likely to slow,” he notes. This phenomenon is particularly evident in more mature economies like those in European nations and the United States.
Donovan emphasizes the crucial role of demographics in wealth creation. “Slowing wealth is tending to be more likely where you have slowing population development or negative population development,” he explains, adding: “You’ve got to bear in mind wealth is something which is generated by people in your country.”
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