In Germany, the situation is gloomy. The country has barely entered the top 20. The Munich-based insurance company Allianz has published its annual "Global Wealth Report."
According to this report, Germany ranks only 19th in the ranking, with net financial assets per capita amounting to 63,540 euros.
In Germany things are not looking great
- The United States tops the wealth ranking with net financial assets per capita at 253,450 euros;
- Followed by Switzerland with 238,780 euros;
- Denmark takes the third position with 163,830 euros.
By the way, Austria is in 18th place, surpassing Germany, with 65,330 euros. Figures from the previous year show that the U.S. has achieved better economic results than Germany.
The most compelling reason for the Americans' advantage is their savings behavior. Over the past 20 years, they have been able to maximize returns from savings in the stock markets. The compounding effect has influenced the well-functioning U.S. stock market.
Germans, on the other hand, have achieved the growth of their wealth almost exclusively through new savings, explains Wirtschaftswoche, citing the report. Allianz experts state that while American investors let the markets do the work, German investors rely more on their own efforts.
According to Allianz's research, private households worldwide experienced more significant losses on their investments last year than ever since the global financial crisis of 2008. Germany is suffering the most. Financial assets decreased by 2.7 percent to 233 trillion euros in 2022.
Germany even witnessed a decline of 4.9 percent, more than in 2008 (4.5 percent). Inflation has eroded two-thirds of the wealth increase since 2019. From a nominal growth of 19 percent, only 6.6 percent remains in real terms.
Adjusted for inflation, investors are now poorer than before the pandemic. However, as emphasized by Allianz, losses in securities such as stocks, bonds, and funds have not deterred Germans from capital markets.
In 2022, 37 percent of reinvested money was directed towards capital market products, mainly funds. It is expected that in 2023, financial assets will increase by six percent worldwide and by three percent in Germany. This is still insufficient considering the ongoing inflation.
Related topics:
- Despite Austria surpassing Germany in the wealth ranking, the situation remains challenging for both countries, with the United States leading with the highest net financial assets per capita.
- According to Allianz, the Germans have primarily grown their wealth through new savings, contrasting the American approach of letting markets work and maximizing returns from savings in stock markets.
- German government no longer links bonds to inflation rate
- Less inflationary pressure in the eurozone
- Economists adjust economic forecasts
