A study published by the “Knight Frank” advisory center revealed, on Wednesday, that the world’s richest people will lose 10% of their wealth in 2022. Global studies expert Liam Bailey said that the war in Ukraine exacerbated the European energy crisis, which led to a significant increase in inflation and interest rates, which made It negatively affected the investment portfolios of the rich, especially in Europe, while the majority of the wealthy expect their portfolios to grow in 2023.
According to a study by the “Knight Frank” advisory center, the richest of the rich lost 10% of their wealth in 2022, after their investment portfolios were affected by the increase in interest rates due to the war in Ukraine. and inflation.
The study stated that the wealth of each of the “richest people” is at least $ 30 million (including the value of their main residence).
“Last year, the war in Ukraine exacerbated the European energy crisis while inflation was accelerating,” said Liam Bailey, global studies expert at Knight Frank. “As a result, 2022 saw one of the biggest hikes in history in terms of interest rates.”
Despite this, “the wealth of 40% of the richest increased in 2022, but the trend was mostly negative, and this is not surprising, because a large number of central banks raised interest rates to contain inflation negatively affected investment portfolios,” according to the center.
Europe witnessed the largest decline, if its wealth decreased by 17%, followed by the “Australasia” region, that is, Australia, New Zealand, Papua New Guinea and neighboring islands (-11%) and the Americas (-10%), while Africa recorded a decline of 5% and Asia, a decline of 7%.
The advisory center’s report referred to a “significant impact on exchange rates” and to “unparalleled strength of the dollar, prompted by the firm commitment of the Federal Reserve (the US central bank) to proceed with one of the fastest rate hikes in history.”
However, the center warned that “if the global economy remains exposed to great risks” in 2023, “the atmosphere in the markets will change quickly,” with “real opportunities in global real estate markets, as it is expected that this year we will reach the turning point in terms of interest rates.” .
Also, according to the center, 69% of the richest investors expect growth for their portfolios this year.