The UAE's financial wealth is expected to grow from $1 trillion to $1.3 trillion between 2022 and 2027, with a compound annual growth rate (CAGR) of 5.5% in new wealth, a report released by Boston Consulting Group (BCG) showed.
Equities and investment funds in the UAE are still seen as the largest asset class, with a sizable share of 58% in total personal wealth in 2022, while bonds are expected to grow at the fastest pace with a CAGR of 8.4% during the period.
Life insurance and pensions are expected to be the third largest asset class by 2027, according to the report titled ‘Global Wealth Report 2023: Resetting the Course.'
"Representing 13.2% of the Middle East and Africa's financial wealth in 2022...the UAE's trajectory signals the country’s strong position as one of the preferred global destinations for the wealthy," said MCG Managing Director and Partner Mohammad Khan.
In 2022, 25% of the UAE's financial wealth came from ultra-high net worth (UHNW) individuals worth more than $100 million, with their influence expected to remain consistent until 2027.
Individuals with fortunes of $1–$20 million had 32% of the UAE's wealth in 2022, with their share likely to rise to 34% in 2027.
The report showed that real assets, which mainly constitute investments in the real estate sector, in the UAE increased by 7.5% annually from 2017 to 2022 to $1.9 trillion, with expectations to increase by 6.9% per annum to $2.6 trillion by 2027. The UAE's liabilities sector grew by 3.1% per annum during the same period and is expected to expand by 6.3% annually to $200 billion by 2027.
4,500. That's how many new millionaires are set to relocate to the UAE this year alone, Henley & Partners said in a June 2023 report.
The rest of the Gulf countries appear to be on a similar growth trajectory. Saudi Arabia represented 14.5% of the Middle East and Africa's financial wealth in 2022, with approximately 21% constituted by UHNW individuals.
Financial wealth in Qatar is expected to rise by 5.1% annually to $388 billion by 2027, primarily driven by equities and investment funds, making up 48% of total personal wealth in 2022.
Kuwait’s financial wealth is set to reach $302 billion by 2027, marking a growth of 2.7% per annum, according to BCG. While 24% of the country’s wealth originated from UHNW individuals worth over $100 million, individuals worth under $250,000 owned 30% of the wealth in 2022, which is also expected to remain unchanged by 2027.
