Real assets in Saudi Arabia are expected to grow from $2.7 trillion in 2022 to $3.6 trillion in 2027, with a CAGR of 5.8%, according to the Boston Consultancy Group (BCG).
Alternatively, liabilities in Saudi Arabia are projected to grow from $0.2 trillion in 2022 to $0.4 trillion in 2027, with a 10.1% CAGR, the global consultancy firm said in a report titled Global Wealth Report 2023: Resetting the Course.
As Saudi Arabia targets its Vision 2030 milestones, experts at the BCG stated that diversification will be key in maintaining its growth trajectory in coming years.
Saudi Arabia's Vision 2030 aims to achieve the goal of increased diversification economically, socially and culturally.
According to the BCG report, unlike the UAE where equities and investment funds represented the largest asset class in 2022, Saudi saw currency and deposits make up nearly half of the total personal wealth last year at 48%. Meanwhile, bonds are expected to show the fastest growth in the kingdom with a 7.4% CAGR between 2022-2027.
Additionally, life insurance and pensions are expected to become the third-largest asset class by 2027.
Natalia Gerashchenko, Managing Director and Senior Partner, the BCG stated the diversification of assets and increasing interest in life insurance and pensions reflected a shift towards long-term planning and financial stability in the country.
Saudi Arabia represented 14.5% of the MEA’s financial wealth in 2022, with approximately 21% originating from UHNW individuals. This trend is anticipated to remain consistent until 2027, the report noted.
(Writing by Bindu Rai; editing by Seban Scaria)