Brazil’s new wealth coefficient saw the largest leap last year as the country gained the most new millionaires. Analysts attribute the increase to solid economic results and the strength of the Brazilian Real against the US dollar. A buoyant stock market also contributed to the jump in Brazilian wealth.
Most new millionaires
According to The Global Wealth Report 2023, Brazil gained 120,000 new millionaires last year, the highest in the world. Brazil stood well ahead of its nearest competitors, Iran and Norway, both with 104,000 additional millionaires.
UBS and Credit Suisse, the authors of the annual report, found that Brazilians with assets worth over US$1 million (around R$5 million) totalled 413,000 at the end of 2022. This figure translates to over 40% more than during 2021.
Brazil, together with a handful of other countries, defied the global trend of fewer wealthy individuals in 2022. Their number dropped by 3.5 million last year to reach a total of 59.4 million worldwide.
Reasons behind the Brazilian uptick
The Global Wealth Report 2023 attributes the increase in new millionaires in Brazil to two main factors. The first lies in the recovery of the Brazilian economy, which grew by 2.4% last year.
The second reason lies in the Brazilian currency, which enjoyed another buoyant year in 2023. The Real saw a 5.3% appreciation against the US dollar last year, boosting the value of assets among Brazil’s wealthy.
Brazil among world’s top 20 UHNWIs
The latest results for global wealth also place Brazil among the world’s richest countries for ultra-high-net-worth individuals, those with assets worth at least US$50 million. In the top 20, Brazil ranks in 14th place.
The US takes the lion’s share of UHNWIs with China some distance behind. Brazil’s share is considerably smaller but still lies ahead of countries such as Hong Kong, Sweden and Spain.
Stock market losses but not in Brazil
According to UBS and Credit Suisse, 2022 was a year of global stock market losses. They often wiped out gains made during 2021, when wealth growth registered record levels.
As a result, gains in markets “were generally small in magnitude”, despite them being more prevalent than losses. However, once again, Brazil stands out with a wealth gain of US$1.1 trillion, the highest in the world.
Real estate assets grow in Brazil
In continental terms, the report finds that non-financial assets grew significantly in importance in Brazil and Mexico. Real estate is one of the main components of this type of asset. As a result, the Brazilian ratio of household debt to gross assets stood at 12.8% last year, compared to 21.7% in 2000.
The Brazilian property market enjoyed a buoyant 2022 despite rising interest rates. The high-end sector, comprised of properties priced at over R$1 million, had a particularly good year.
Ceará has most billionaires in Northeast Brazil
The growth in Brazilian millionaires was nationwide, but their presence in Ceará in Northeast Brazil is particularly significant. According to the latest list from Forbes, the state has 17 billionaires in 2023, up from 16 in 2022, and the sixth highest number in Brazil.
However, Ceará’s HWNIs stand out most at regional level – over half the billionaires in Northeast Brazil are in Ceará. Its nearest competitor, Pernambuco, has just six, while Bahia has only two.
Mario Araripe is the richest person in Ceará and ranks in 21st position, nationally. His fortune is estimated at R$13.9 billion.
Reason for high levels of wealth in Ceará
Despite not ranking as the largest economy in Northeast Brazil or being one of the country’s economic drivers, Ceará does have a proportionately high number of companies on the Brazilian stock exchange.
They currently number nine, well ahead of Pernambuco and Bahia combined. 13 of the mega fortunes in Ceará are linked to these public companies in various sectors such as private healthcare, pharmaceuticals, energy and telecommunications.
(Source: The Global Wealth Report 2023, Forbes)