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Most of the new millionaires will stem from the transport, IT services, and consumer services sectors.
The UAE is set to add 10,000 new millionaires on average every year in five years, increasing by nearly 22 per cent between 2020 to 2025, according to a new report released on Tuesday.
Knight Frank’s latest Wealth Report 2021 said the number of millionaires with a wealth of $1 million-plus will increase from 155,929 in 2020 to 205,664 in 2025 while high net worth individuals (HNWIs) with assets of more than $30 million will increase from 1,305 in 2020 to 1,592 in 2025. In total, this will amount to 50,000 new millionaires between 2020 to 2025.
Taimur Khan, Head of Research at Knight Frank Middle East, said the increase in the population of new millionaires is likely to be a mixture of the two factors.
“Firstly, as economic growth returns, we expect an increase in the number of homegrown millionaires. Secondly, we see that the net migration will stand at almost 740,000, and here we expect that a certain portion of this number will consist of HNWIs and UHNWIs… As we continue to see the economy diversify and open-up, we are likely to see greater levels of entrepreneurship ensure which is in turn likely to underpin growth in wealth,” he said.
Looking at economic growth forecasts in the five years to 2025, Khan expects that most of the new millionaires will stem from the transport, IT services, and consumer services sectors.
However, the population of millionaires in the UAE fell by nearly 38,000 last year from 195,304 in 2019 to 157,234 in 2020 due to the impact of Covid-19.
“The pandemic has impacted the fortunes of many in the Middle East, and Middle Eastern HNWIs and UHNWIs were not spared, with the total number of each decreasing by 11.3 per cent and 10.1 per cent in 2020, respectively. However, this decline was not uniform across all countries, In Saudi Arabia over this period, the number of UHNWIs increased by 9.6 per cent, the 10th fastest growth rate globally. In fact, its UHNW population has grown by 227 per cent over the last five years, the fastest growth rate globally over this period,” said Khan.
“As the region continues its various economic diversification programmes, we expect that there will continue to be significant growth in the number of HNWI, UHNWI, and billionaires residing in the region,” he added.
Globally, the number of ultra-high-net-worth individuals, those with $30 million or more, is predicted to grow by 27 per cent in the next five years to 2025, taking the population to 663,483 from 521,653 last year. While the population of millionaires owning $1 million-plus wealth will jump 41 per cent between 2020 to 2025, rising from 48,505,781 last year to 68,185,442 in 2025.
Asia is likely to see the largest rise with a growth of 39 per cent, led by Indonesia (67 per cent,) and India (63 per cent,). Europe will retain its crown as the second-largest wealth hub with expected growth of 23 per cent, bringing the total number of UHNWIs to 185,860.
In the Middle East, Knight Frank expects the number of UHNWIs to increase by 24.6 per cent, in the five years to 2020, with the region expected to remain the fourth largest wealth hub in the world. The population of millionaires with $10 million-plus assets will increase from 1.117 million in 2020 to 1.445 million in 2025. Similarly, UNHWIs owning $30 million plus wealth jump from 29.880 to 37,241 during the period, an increase of 25 per cent. — waheedabbas@khaleejtimes.com
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