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29 May 2023

UAE to create 4 new millionaires per day

Infrastructure development initiatives was one of the major drivers of capital into Dubai in 2014. (Shuttertsock)

By Shuchita Kapur

Statistics reveal that, since the end of the global economic slowdown, UAE residents in general have been getting richer every year, and are only expected to get even richer before the big Expo 2020 event in Dubai kicks off.

Now, a new report suggests that a surge in the local economy boosted by the projects undertaken for the preparation of the prestigious Expo 2020 event will create more than 7,700 new millionaires by 2019.

According to a new report from WealthInsight, the millionaire’s club in the UAE stood at 50,595 by the end of 2014.

The country is forecast to have 58,335 millionaires in five years’ time – a rise of 15 per cent over the 2014 statistic, translating into 1,548 new millionaires minted every year, or 4.2 millionaires every day of the year for the next 5 years.

The Expo will indeed be a major event that is expected to benefit the economy and the UAE’s residents in all possible ways. The wealthy in the UAE have been growing consistently in numbers and this figure is expected to grow further from now until 2020.

This number itself is a massive 40 per cent increase on the 35,960 millionaires the UAE had in 2010, which translates into an annual growth of 8.9 per cent.

GCC-wide, Saudi Arabia, the largest economy in the region, had 49,168 high net worth individuals at the end of last year while the number in Qatar stood at 34,785.

A previous Wealth-X and UBS World Ultra Wealth Report 2014, states that the UAE is ranked No. 22 in the world according to the number of multi-millionaires that live here, ahead of global heavyweights such as Russia, Argentina and Sweden.

The same report revealed there are a total of 1,275 multi-millionaires in the UAE, up from 1,050 last year. These individuals now hold a collective $255 billion in net wealth among them, up from $190 billion last year.

Going forward, the WealthInsight report says the UAE along with Saudi are expected to boast of high rich population in the region. While the UAE will have 58,335 millionaires in five years’ time, the latter is expected to have 59,940 millionaires in 2019.

Regionally, Middle Eastern millionaires are expected to grow at a fast pace, forecasting a growth rate of 4.1 per cent on average between 2015 and 2019 and the total number of the Middle Eastern millionaires is expected to reach 226,809 by 2019.

Millionaire population in the Gulf region grew by a CAGR of 8.1 per cent from 136,195 individuals in 2010 to 185,816 individuals in 2014.

The UAE, Saudi Arabia, Kuwait and Qatar accounted for more significant proportions of millionaires than other Middle Eastern markets such as Iraq and Jordan.

However, the millionaire population in Qatar is one of the fastest growing in the region, recording a review-period CAGR of 8.9 per cent between 2010 and 2014. Bahrain also has one of the region’s fastest-growing millionaire populations.

“Several factors support fast-growing number of HNWIs [high net worth individuals] in Bahrain and Qatar but the most obvious influential reason is the size of their economies.

Being smaller and less developed markets, Bahrain and Qatar stand greater chance for growth than matured markets such as the UAE and Saudi Arabia,” comments Dr Roselyn Lekdee, Analyst at WealthInsight.

“When the market is new, there are fewer players and less competition, which in some cases can enhance greater chance for the SMEs [small and medium-sized enterprises] to use first-mover advantage strategy – generating wealth and hence creating more millionaires,” says Lekdee.