The rapid growth in global wealth | Credit: McKinsey
Net worth has tripled since 2000, but the increase mainly reflects valuation gains in real assets, especially real estate, rather than investment in productive assets that drive our economies.
At the global level, real assets constitute net worth, while aggregate financial assets and liabilities net to zero
- The market value of the global balance sheet tripled in the first two decades of this century
- Real estate makes up two-thirds of global real assets or net worth
- Asset values are now nearly 50 percent higher than the long-run average relative to income
- Financial assets and liabilities also grew faster than GDP, vastly exceeding net investment
- Several scenarios are possible, with an imperative to deploy wealth more productively for critical investment needs
McKinsey’s take on the current state of global wealth and the crucial role that real assets are playing within the global balance sheet (link).
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