According to a new analysis by Boston Consulting Group (BCG), Bahrain’s wealth is a quarter of Saudi Arabia’s $1 trillion, yet the smaller country has witnessed the greatest wealth growth in the GCC since 2015.
Mr. Mustafa Bosca, Managing Director, and Partner at BCG stated that there were several factors involved in the region’s wealth rise, including a higher emphasis on savings as people stayed at home during the COVID-19 travel restrictions, while adding that first and foremost, the government support in terms of various ways, both through the banking system, through contribution through different parts of the economy.
As per BCG, global wealth continued to expand in 2020 despite the pandemic, and the Middle East was no exception, growing 8 percent to $11 trillion.
Bahrain achieved the fastest compound annual growth rate (CAGR) of 4.9 percent to reach $66 billion since 2015, Mr. Bosca revealed that Oman is likely to develop at a far faster rate in the future.
Further, Saudi Arabia’s wealth will reach $1.2 trillion by 2025, with a CAGR of 4.1 percent since 2015. Oman’s CAGR was 3.8 percent, giving a total wealth of $64 billion, whereas Qatar’s CAGR was 3.6 percent, resulting in a total wealth of $263 billion.
The UAE’s CAGR was the least, but it has the second-largest pool of wealth, after Saudi Arabia, at $600 billion. With 45 percent and 26 percent of the GCC’s total wealth, Saudi and the Emirates control over three-quarters of the region’s wealth.
Furthermore, in BCG’s report, Global Wealth 2021: When Clients Take the Lead, Mr. Bosca said the UAE has established itself as a key global financial center, housing a considerable amount of cross-border wealth coming from other areas of the world and the Middle East.
Mr. Bosca also mentioned a potential opportunity for wealth managers in the Middle East, claiming that there are 4.5 million people in the region with assets worth between $2.7 million and $2.7 million who are now unserved.