By Julius Baer has released its highly anticipated Global Wealth and Lifestyle Report for 2024, providing a comprehensive analysis of the cost of living well in 25 cities around the world. This year’s report highlights the continued rise in prices for goods and services, albeit at a slower pace compared to previous years. Despite these increases, affluent individuals remain willing to invest in their lifestyles, families, and futures. The report also sheds light on the shifting dynamics of global wealth, with significant changes in city rankings influenced by currency fluctuations and economic conditions.
The 2024 report reveals several key trends in global wealth and lifestyle. One of the most notable findings is the normalization of inflation rates over the past 12 months. While prices continue to rise, the rate of increase has slowed to 4% on average in US dollar terms, compared to 6% in 2023. This deceleration is attributed to a combination of factors, including improved economic stability and currency fluctuations.
Goods have seen a higher price increase than services, with an average rise of 5% for goods and 4% for services. Premium consumer items such as fashion and jewellery have experienced the highest price hikes, driven by increased raw material, energy, and staffing costs. Despite these rising costs, high-net-worth individuals (HNWIs) are still willing to spend, particularly on hospitality, fashion, and accessories.
The report also highlights the impact of currency performance on city rankings. Cities like Tokyo have seen a drop in their rankings due to weaker currency performance, while cities with stronger currencies, such as those in Europe, have climbed the ranks. This shift underscores the importance of currency strength in determining the cost of living well in different parts of the world.
Regional Insights
The Asia Pacific (APAC) region continues to dominate the top spots in the Julius Baer Lifestyle Index, with Singapore and Hong Kong securing the first and second positions, respectively. Despite a slight drop, Shanghai remains in the top ten, reflecting the region’s continued prominence in global wealth. However, some cities in APAC, such as Tokyo, Bangkok, and Jakarta, have seen declines in their rankings due to various economic factors.
In contrast, the Europe, Middle East, and Africa (EMEA) region has shown a strong return to prominence. Cities in this region have benefited from stronger currency performance and economic recovery, leading to improved rankings in the Lifestyle Index. This resurgence highlights the dynamic nature of global wealth distribution and the influence of regional economic conditions on lifestyle costs.
The report also provides insights into the spending habits of affluent individuals in different regions. In APAC, there is a notable preference for high-end hospitality and luxury fashion, while in EMEA, there is a growing interest in sustainable and eco-friendly products. These regional preferences reflect the diverse priorities and values of HNWIs around the world.
Future Outlook
Looking ahead, the Global Wealth and Lifestyle Report 2024 suggests that the trend of rising prices for goods and services will continue, albeit at a moderated pace. The normalization of inflation rates is expected to provide some relief to consumers, but the overall cost of living well will remain high. This ongoing trend underscores the importance of strategic financial planning and investment for affluent individuals.
The report also emphasizes the need for adaptability in the face of changing economic conditions. Currency fluctuations, geopolitical events, and technological advancements will continue to shape the global wealth landscape. Affluent individuals and businesses must stay informed and agile to navigate these changes effectively.
In conclusion, the Julius Baer Global Wealth and Lifestyle Report 2024 offers valuable insights into the evolving dynamics of global wealth and lifestyle. By analyzing the cost of living well in major cities around the world, the report provides a comprehensive overview of the trends and factors influencing the spending habits of affluent individuals. As the global economy continues to evolve, staying informed and adaptable will be key to maintaining and enhancing one’s lifestyle.