Saudi Arabians’ private wealth will reach USD 1.1 trillion in investible assets by 2022, according to Boston Consulting Group’s (BCG’s) Global Wealth Report 2018.
According to Markus Massi, senior partner and managing director of BCG Middle East’s financial services practice, investible assets will increase at a compound annual growth rate (CAGR) of 6% and non-investible assets at a CAGR of 5% over the next five years.
Offshore assets accounted for 49% of assets in 2017, following by currency and deposits at 26%, equities and investment funds at 19% and life insurance and pensions at 6%.
“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%, 26% and 18% respectively,” Massi said.
Across the Middle East region as a whole, personal wealth stood at USD 3.8 trillion in 2017, with per capita wealth at USD 18,000. Disparities between countries are large, from more than USD 400,000 per person in some GCC states to less than USD 6,000 in Iraq.
Despite the high overall levels of wealth in Saudi Arabia, the country has recently seen a surge in inflation and borrowing.
The value of loans taken out to cover education, transportation and furniture & durable goods expenditures reached SAR 31 billion in the first quarter of 2018, according to Saudi Arabian Monetary Authority data.
Jadwa Investment has projected an inflation rate of 3.1% for the full year due to the impact of the 5% sales tax introduced in January and expensive imported food.