The findings from the report also list the UAE as leading the GCC in terms of annual growth, positioning it ahead of Saudi Arabia, which forecasts a CAGR of 4.3% during the same period. The kingdom’s financial wealth will grow from $1.1 trillion in 2022 to $1.3 trillion in 2027.
BCG’s report also revealed that equities and investment funds made up the largest asset class, standing at 58% of total personal wealth in 2022 in the UAE, while bonds expect a fast-growing CAGR of 8.4% between 2022 and 2027. Life insurance and pensions are set to become the third largest asset class by 2027.
“Representing 13.2% of the Middle East and Africa (MEA) financial wealth in 2022 and growing at a rate of 6.5% per annum from 2017 to reach $1 trillion in 2022, the UAE’s trajectory signals the country’s strong position as one of the preferred global destinations for the wealthy,” said Mohammad Khan, Managing Director and Partner, at BCG, in a statement, adding that the growth has proven to be a strong value proposition for high-net-worth individuals.
Furthermore, real assets in the UAE grew 7.5% per year from 2017 to 2022, totaling $1.9 trillion. This is set to increase by 6.9% per year to reach $2.6 trillion by 2027. At the same time, the liabilities sector grew by 3.1% per annum during the same period and will continue to expand by 6.3% per annum to $0.2 trillion by 2027.
Meanwhile, working towards achieving its Vision 2030 targets, BCG experts highlight that diversification will be a key factor in Saudi Arabia’s growth trajectory in the next few years.
The report states that currency and deposits represented the largest asset class in the kingdom, making up nearly half of the total personal wealth in 2022 at 48%. Bonds are expected to increase fastest, with a 7.4% CAGR between 2022 and 2027. Life insurance and pensions are thought to become the country’s third-largest asset class by 2027.
The kingdom has also represented 14.5% of MEA’s financial wealth in 2022, with this trend to remain consistent until 2027.
On the other hand, Saudi’s real assets are forecasted to grow from $2.7 trillion in 2022 to $3.6 trillion in 2027, with a CAGR of 5.8%. Liabilities will also increase from $0.2 trillion in 2022 to $0.4 trillion in 2027, with a 10.1% CAGR.