McKinsey report reveals wealth growth outpaces real economy in 2025

The world got $100 trillion richer last year. The problem is that most of that wealth wasn’t built, it was inflated.

The McKinsey Global Institute’s latest report, “The global balance sheet 2026: Imbalance and divergence,” puts the global balance sheet at approximately $1.8 quadrillion in 2025. Household net worth alone reached $570 trillion, climbing $40 trillion in a single year for a 7.3% annual gain that comfortably outpaced the 5.9% long-term average dating back to 2000.

The catch: roughly 20% of that wealth increase came from real capital formation, meaning new factories, infrastructure, productive investment. The remaining bulk, about 58%, came from valuation gains on assets that already existed. Stocks going up. Property prices ticking higher. Paper wealth accumulating without a corresponding expansion in what the economy actually produces.

Equities did the heavy lifting

Stock markets were the single biggest driver of household wealth creation in 2025, accounting for 57% of the increase. Real estate, long the dominant wealth-building asset for most families globally, contributed just 15%.

The US was the standout. American equities reached 3.7 times the country’s GDP and 2.4 times corporate net assets.

China presented the mirror image of this dynamic. Corporate debt in China hit 80% of real assets, far above the global average of 50%. Declining property values have been a key driver, compressing the denominator while debt loads remain stubbornly elevated.

Four roads forward, only one looks good

McKinsey’s report lays out four potential scenarios for where the global balance sheet goes from here. Only one of them, what the firm calls “productivity acceleration,” paints a genuinely optimistic picture. In that scenario, breakthroughs in artificial intelligence and related technologies drive enough real economic output growth to justify current asset valuations.

The other three paths are less pleasant reading. One leads to persistent inflation as asset prices continue climbing without productivity to match. Another points toward stagnation, where growth flatlines and wealth accumulation simply stops. The fourth scenario is what McKinsey terms a “balance-sheet reset,” which is a polite way of describing a world where asset prices correct sharply to realign with underlying economic fundamentals.

The divergence problem

The US and China, the world’s two largest balance sheets, are diverging in structurally different ways. The US is accumulating wealth through equity appreciation, increasingly disconnected from corporate fundamentals. China is watching its corporate balance sheets deteriorate under the weight of property deflation and debt.

The report’s emphasis on valuation-driven wealth also raises questions about inequality. When 57% of new household wealth comes from equities, the gains flow disproportionately to those who own stocks. In most countries, equity ownership remains heavily concentrated among upper-income households.

The 20% figure for real capital formation is particularly striking when set against historical context. When four-fifths of wealth growth comes instead from existing assets appreciating in value, it suggests the financial system is rewarding ownership over creation.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.