30/07/18

Personal wealth in Saudi Arabia to total $1.1trn by 2022

Private wealth in Saudi Arabia grew 3 percent between 2016 and 2017 and is expected to grow to $1.1 trillion in investible assets by 2022, according to a new report from the Boston Consulting Group (BCG).

In its 2018 global wealth report, BCG found that personal wealth across the Middle East rose by 11 percent to $3.8 trillion in 2017.

In Saudi Arabia, personal wealth is projected to grow at a compound annual growth rate of 5 percent.

Markus Massi, senior partner and managing director of BCG Middle East’s financial services practice, said that “both investible and non-investible assets in Saudi Arabia are expected to grow at a steady pace.”

“Investible assets will grow at a CAGR of 6 percent and non-investible assets will grow at a CAGR of 5 percent in the next five years,” he explained.

Massi added that offshore assets were the highest proportion of assets in Saudi Arabia in 2017 at 49 percent, following by currency and deposits at 26 percent, equities and investment funds at 19 percent and life insurance and pensions at 6 percent.

“For the most part, this asset allocation is expected to experience slight growth by 2022, with offshore assets, currency and deposits, and equities and investment funds projected to reach 50 percent, 26 percent and 18 percent respectively,” he added.

Gulf wealth

As an asset class, offshore assets grew by 5 percent, while insurance and pensions grew by 4 percent and equities and investment funds at 3 percent. While bonds experienced a significant global decline of 10 percent in the 2016-2017 period, in Saudi Arabia bonds did not experience any movement.

In neighbouring Oman, personal wealth was found to have grown at 5 percent over the same time period, compared to 7 percent in Bahrain and 5 percent in Kuwait, where personal wealth is expected to grow at a CAGR of 5 percent to reach $260 billion in investible assets by 2022.

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