Boston Consulting Group (BCG) released a report on Tuesday indicating that the UAE’s financial wealth is anticipated to experience a compound annual growth rate (CAGR) of 5.5%, reaching $1.3 trillion by 2027, up from $1 trillion in 2022. Notably, individuals possessing wealth in the bracket of $1-20 million are set to hold a growing portion of this wealth, increasing their share from 32% in 2022 to 34% by 2027.
In 2022, ultra high net worth individuals (UHNWIs) – those having assets exceeding $100 million – represented 25% of the UAE’s financial wealth. This influential group is projected to maintain its significance through 2027. As a testament to the UAE’s global appeal for the affluent, the nation recorded an 18.1% year-on-year surge in UHNWI population in 2022, resulting in a total of 1,116 individuals, as highlighted by “The Wealth Report” from Knight Frank. Furthermore, according to the Residential Real Estate 2023 report by Wealth-X & Realm, Dubai is home to the majority of UHNW primary residents, constituting two-thirds of its global UHNWI populace.
Lukasz Rey, Managing Director and Head of the Middle East Financial Institutions Practice at BCG, commented on the UAE’s economic trajectory, emphasizing the role of high net worth individuals as catalysts for regional innovation, investment, and sustained growth.
The report, titled “Global Wealth Report 2023: Resetting the Course,” noted that equities and investment funds comprised the predominant asset class in the UAE in 2022, making up 58% of the total onshore personal wealth. While bonds are projected to witness the most rapid growth with an 8.4% CAGR from 2022 to 2027, life insurance and pensions are poised to emerge as the third predominant asset class by 2027.
Mohammad Khan, Managing Director and Partner at BCG, underscored the UAE’s significant role, highlighting that it accounted for 13.2% of the Middle East and Africa’s financial wealth in 2022. He further noted that the UAE’s consistent growth trajectory underscores its appeal as a preferred global hub for the affluent.
In addition, the report shed light on the evolution of the UAE’s real assets and liabilities. Real assets witnessed a growth of 7.5% annually from 2017 to 2022, totaling $1.9 trillion, and are projected to escalate by 6.9% annually, reaching $2.6 trillion by 2027. On the other hand, the liabilities sector expanded at 3.1% annually between 2017 and 2022 and is expected to grow at 6.3% annually to hit $2 trillion by 2027. The report concludes that such balanced growth showcases the UAE’s confidence in strategic risk-taking, which potentially augments its overarching growth narrative.