The richest of the rich lost ten percent 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, according to a study by the “Knight Frank” advisory center.
And according to a study published by the center on Wednesday, the total wealth of these people who are considered among the “richest of the rich”, that is, the wealth of each of them is at least $ 30 million (including the value of their main residence) “decreased by ten percent in the year 2022, which is a decline of about Ten thousand one hundred billion dollars.
Liam Bailey, global studies expert at Knight Frank, said: “Last year, the Ukrainian crisis exacerbated the European energy crisis and inflation that was already accelerating. As a result, the year 2022 witnessed one of the largest hikes in history in terms of interest rates.”
Despite this, “the wealth of 40 percent of the richest people increased in the year 2022, but the trend is 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 Center.
Europe witnessed the largest decline if its wealth decreased by 17 percent, followed by Australasia, that is, Australia, New Zealand, Papua New Guinea and neighboring islands (-11 percent), and the Americas (-10 percent), while Africa recorded a decline of five percent and Asia, a decline of seven percent.
The advisory center’s report referred to a “significant impact on exchange rates” and to “an unrivaled strength of the dollar, prompted by a firm commitment by 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 the year 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.
According to the center, 69 percent of the richest investors expect growth for their portfolios this year.
