NEW YORK, Oct 24 (Reuters) - Global art sales fell 4%

last year to around $65 billion, as the wealthiest buyers

reduced purchases, according to the Art Market Report, published

by Swiss bank UBS on Thursday.

The bank's wealth management division advises clients

interested in buying art, although it does not consider the

purchases as investments.

Inflation, high interest rates and political instability

made the wealthiest clients become more cautious with art

purchases and take more time deciding on potential acquisitions,

according to the UBS Global Wealth Management chief economist

Paul Donovan.

Sales volume at art auctions dropped 7% and at dealers, by

3%, mainly by slowing demand for more expensive art and

purchases of average lower value.

The only country where art sales grew was China, which

became the world's second-largest art market after the U.S. with

a 9% rise in transactions to $12.2 billion. Donovan credits the

higher activity by Chinese buyers to delayed post-COVID lockdown

behavior, since China kept isolation measures longer than

Western countries.

High interest rates and inflation contributed to the

collapse of the most speculative art transactions, such as sales

of digital art known as NFT, the UBS economist added.

NFT sales peaked at $2.9 billion in 2021 and were 51% lower

than the peak last year. They do not seem to have recovered even

later this year, Donovan said, after interest rates began

dropping and other assets such as crypto currencies rose.