Allianz Global Wealth Report 2024 : Surprising relief

Executive Summary

Surprising relief
Against the backdrop of resilient economies and booming markets despite monetary tightening, global financial assets of private households recorded strong growth in 2023: With an increase of +7.6%, the losses of the previous year (-3.5%) were more than made up for. 

No place for bank deposits
In 2023, the normalization of fresh savings continued after the pandemic-related boom years of forced savings: They fell by -19.3% to EUR3.0trn. 

The Atlantic divide
Savings behavior is a decisive factor for asset growth. There are basically two sources of growth in financial assets: savings efforts and price increases (increase in value).

Golden boys and girls
Market developments are also the main reason for the huge differences in financial assets between the generations. 

Broad- based recovery
In contrast to 2022, in which financial assets shrank in many markets and regions – and also worldwide – the recovery in 2023 was broad-based. 

There is only one China
The long-term development over the last 20 years naturally shows greater differences, with the catch-up effects of the emerging economies taking full effect: China, Latin America and Eastern Europe are achieving double-digit growth rates per year, while Japan is only growing at +2% and Western Europe at just under +4%. 

Three lost years
Inflation has only become really painful in recent years. At the end of 2023, real financial assets worldwide were only at the level of 2020 – the last three years were lost years for savers worldwide. 

The new reality of a fragmenting world
In one respect, 2023 represented a return to the new reality of a fragmenting world: The growth advantage of the emerging economies over the advanced economies has shrunk significantly again, amounting to just 2pps last year. 

USA at the top
The fact that emerging economies have largely lost their growth lead in six of the last seven years is primarily due to developments in the US. 

Moderate growth ahead
The (so far) positive trend on the stock markets and resilient economies should lift financial assets in 2024. Assuming stable savings efforts, we expect global financial assets to grow by +6.5% in 2024. 

Debt stability
The rise in interest rates had a clear impact on the liabilities side of private households' balance sheets in 2023: Growth in private debt weakened further to +4.1% worldwide, the lowest growth in nine years. 

Debt outgrows financial assets in most emerging economies
Relatively strong growth in assets and relatively weak growth in liabilities led to a significant increase of +8.8% in net financial assets (financial assets less liabilities) in 2023. 

Setback in real estate
In contrast to financial assets, real estate assets developed weakly in 2023: at +1.8%, the lowest growth in 10 years was recorded. 

The invisible value destroyer: transition risk
Although natural catastrophes are much more visible, the long-term impact of climate change on housing prices comes mainly through transition risk i.e. the energy consumption of buildings, particularly for heating. 

Global wealth distribution: Waiting until 2100
The concentration of financial assets on a global scale remains extremely high. 

Getting a seat at the table
However, the picture of global wealth distribution brightens somewhat if we look not only at the richest 10%, but also at the development in the middle.

The rich are getting richer – but the poor are not getting  poorer
At first glance, wealth concentration at national level has hardly changed: in 2003, the richest decile's share of net financial assets was 60.6% (unweighted average); 20 years later it was 61.1% – an increase of 0.5pp.