Credit Suisse, the world’s second-biggest private bank, said yesterday that household wealth in the Middle East and North Africa dropped 2.2 per cent in the past year.
The slide in household wealth in the region comes amid a sharp drop in the price of crude oil, the main driver of economic growth in the Arabian Gulf. Since last summer, the price of crude has shed about 50 per cent of its value, the biggest drop since the global financial crisis of 2008.
Still, despite the decline in wealth, the authors of the report say the number of millionaires in the region is expected to grow by more than half in the next five years.
“We are clearly in a growth industry, with wealth set to continue its upward trajectory,” said Michael O’Sullivan, a chief investment officer at Credit Suisse’s private banking and wealth management division.
Household wealth in the Middle East and North Africa region slipped to US$4.4 trillion in mid-2015 from the same period last year, while total global household wealth fell 4.7 per cent to $250.1tn, the report said. Credit Suisse attributed most of the drop in global household wealth to the strengthening of the US dollar against the world’s major currencies, although there has also been a weakening of asset values.
Even so, the report noted that the richest of the rich have been growing their pots of money, with the top 1 per cent of the world’s richest now controlling half of the world’s household wealth.
Globally financial assets, such as stocks and bonds, fell 3.3 per cent in the past year. Non-financial assets, which include real estate and gold, fell 6.6 per cent, the report said.
One of the worst hit assets in the world in the past year has been oil, but despite the massive drop, the result of weakening demand from China and other emerging markets, regional wealth was maintained.
The Credit Suisse report noted that in the Middle East, Qatar recorded the highest average wealth per adult at $157,000 in mid-2015, growing 0.8 per cent from the same period last year. The UAE followed close behind with $144,400 per person, declining 0.3 per cent from last year. The biggest drop, however, came from Kuwait, where wealth per adult fell 7.6 per cent from last year to $113,400.
No one at Credit Suisse was available to elaborate on its findings in the Middle East.
Separately, the Arcadis Global Wealth Index revealed yesterday that Qatar boasts the highest amount of wealth per person as measured by so-called building stock, which calculates holdings of real estate and infrastructure. Arcadis is a building consultancy company. The UAE ranked fifth in the global survey.
Qatar has $198,000 of built assets per person, while its closest competitor Singapore had $192,000 per person, the report said.
The consultancy said that Qatar’s economic growth will continue to be supported by massive investment in infrastructure. The tiny Arabian Gulf nation is expected to spend over $150 billion in the next decade, with $20bn of that going towards roads, $40bn in stadia and $8bn on ports, Arcadis said.
mkassem@thenational.ae
mfahy@thenational.ae
Follow The National's Business section on Twitter
