The United Arab Emirates (UAE) financial wealth will experience a sturdy Compound Annual Growth Rate (CAGR) of 6.7% in new wealth, rising from USD 0.7 trillion to a high of USD 1 trillion from 2021 – 2026, according to a new report by Boston Consulting Group (BCG).
The report titled, Global Wealth 2022: Standing Still Is Not an Option, shows equities and investment funds in the UAE make up the largest asset class at 64% of total personal wealth in 2021 and are by 2026 expected to grow the fastest with a CAGR of 8.8%. Whereas currency and deposits represent the second largest class at 29% of total personal wealth in 2021, bonds make up a mere 3%. It is expected life insurance and pensions will become the fourth largest asset class over the next five years.
“We see the Middle East and Africa financial wealth growing year after year, with the UAE in particular, excelling, despite a tremulous global market. In fact, the UAE represented 10.2% of the Middle East and Africa’s financial wealth in 2021, having grown 6.4% every year since 2016 to USD 0.7 trillion,” said Mustafa Bosca, Managing Director and Partner, BCG.
In 2021, approximately 41% of the UAE’s wealth derived from Ultra High Net Worth (HNW) individuals who are worth more than USD 100 million, with this expected to grow to 43% in 2026, whereas individuals with wealth ranging above USD 1 million held 28% of the UAE’s wealth in 2021 and is expected to remain the same by 2026.