Saudi Arabia and UAE are expected to see a significant growth in the number of millionaires in the next five years, Credit Suisse Research Institute revealed Monday it its sixth annual Global Wealth Report which focuses on how the middle class has developed since the turn of the century. "In the Middle East, Saudi Arabia and UAE are expected to see an increase in the number of dollar millionaires by 72% and 62% respectively, in the in the next five years. Overall, the MENA region numbered 330,000 millionaires in 2015, up by more than 240% since 2000. The number of millionaires is projected to rise by another 52% to 500,000 adults by 2020," the report said. In terms of total wealth, Saudi Arabia ranked first among GCC economies, with an estimated total wealth of $0.7 trillion, closely followed by the UAE with an estimated wealth of $0.6 trillion. Egypt ranked first among North African nations with an estimated wealth of $0.4 trillion. Emerging markets will likely account for 9.1% of millionaire wealth in 2020, 1% above current levels. Qatar recorded the highest average wealth per adult of $157,000 in mid 2015, growing 0.8% from the same period last year, while UAE followed closely with $144,400, but declined 0.3%from last year. Among major economies, Qatar occupied the 21st place globally in terms of average wealth, up from 29th place in the year 2000. Kuwait's wealth per adult amounted to $113,400 – a decline of 7.6% from last year. The average wealth per adult in Bahrain fell 0.3% from mid last year. Average wealth per adult in Saudi Arabia, the largest economy in the GCC, rose 0.9% from mid 2014 to reach $39,500, while Egypt's wealth per adult fell 5.3% to $7,000. Household wealth in the MENA region totaled $4.4 trillion in mid-2015, down 2.2% since mid-2014. In constant currency terms, however, net wealth increased by 1.7%. Since 2000, the group of countries have increased their combined wealth by 147%, outpacing other regions such Africa and Asia Pacific. Interestingly, the growth rate in number of adults has outstripped that of all other regions over the same period, but the region did not lag behind in terms of wealth per adult growth. Since the turn of the century, average wealth per adult has grown by 62%, just below the global rate of 65%. Average wealth per adult in MENA declined by -6.9% to $15,800 in mid-2015, from 16,900 in mid-2014, although this decline is largely due to exchange rate weakness. Wealth per adult is currently some 22% below its peak in 2007, but in constant currency terms it is down just 5% from its peak. The number of dollar millionaires will likely rise by 46.2% over the next five years, increasing to a record 49.3 million adults. Among the regions, China is likely to see the largest percentage increase, with the number of millionaires increasing by 74.0%. Africa will likely be the next performing region, with millionaires rising by 73.0%, albeit from a lower base. Overall, emerging markets (low-to middle-income economies) account for 6.5% of millionaires and will see their share rise to 7.4% by the end of the decade. High-income economies will still account for the bulk of new millionaires, with 14.0 million adults entering this category. Millionaire net wealth is likely to rise by 8.4% annually, as more people enter this segment. The Credit Suisse Research Institute estimates that there are 123,800 ultra-high net worth (UHNW) individuals worldwide, defined as those with a net worth exceeding $50 million. Of these, 44,900 are worth at least $100 million and 4,500 have assets above $500 million. The strong dollar has reduced the number of UNHW adults by 800 since mid-2014, but our calculations suggest that there has been a small increase in the number of individuals owning more than $500 million. The net worth of the middle class in 2015 amounted to $80.7 trillion worldwide, or 32% of global wealth. Adults with beyond the middle-class threshold accounted for a further $150 trillion, bringing the total wealth of the middle class and beyond to $231 trillion, or 92% of global wealth. In all regions and in almost all countries, the wealth of the middle class and beyond has grown strongly this century. Globally, the wealth of those above the lower-middle-class threshold has more than doubled, from $108.3 trillion in 2000 to $230.9 trillion in 2015. In Africa, it has grown by 140% and in India by 280%, while China has experienced a six-fold increase. Part of the increase reflects population growth and erosion of purchasing power by inflation. At the same time, after controlling for these factors there remains significant growth in the wealth of those above the middle-class cut-off. Wealth is set to continue its upward trajectory and could grow at an annual rate of 6.6% (including inflation), reaching $345 trillion in 2020. This is below last year's projection of 7%, but not outside historical norms. Between 2000 and 2007, wealth grew at a sizeable pace of 9.4%. Following the fiancial crisis of 2008, its pace has admittedly been tepid (just 4.4% annually), but this is in large part due to the strong dollar that has been appreciating at an annual pace of more than 1% versus other currencies (weighted according to wealth). To put this in context, wealth is currently at $250.1 trillion, 336% the projected global GDP for 2015 (which the IMF estimates at $74.6 trillion) and it could rise to 352% of GDP by 2020 (forecast at $98.1 trillion), approximately in line with its 15-year average of 349%. — SG
