Saudi Arabia’s financial wealth expected to hit $1.3tn by 2027: BCG

Saudi Arabia will register “incredible” economic growth in the next four years, with its financial wealth growing by a compound annual rate of 4.3 percent to hit $1.3 trillion in 2027, according to global management firm Boston Consulting Group.

A report released on Wednesday further disclosed that real assets in the Kingdom are expected to hit SR3.6 trillion ($960 billion) in 2027, up from SR2.7 trillion in 2022.

The report further revealed that currency and deposits represented the largest asset class in Saudi Arabia, making up 48 percent of total personal wealth in 2022.

Earlier this month, the International Monetary Fund said the Kingdom’s fiscal prospects are solid in the near term, with risks broadly balanced, driven by Vision 2030, which has been diversifying the economy since its launch in 2016.

“Saudi Arabia’s trajectory signals incredible growth and potential despite global market challenges. We anticipate steady growth in the coming years, and a continued focus on diversification will be key to maintaining this growth trajectory,” said Natalia Gerashchenko, managing director and senior partner at BCG, in a statement.

On the other hand, bonds are forecast to register the fastest growth of 7.4 percent between 2022 and 2027.

The BCG study also noted that life insurance and pensions are slated to become the third-largest asset class by 2027.

“The diversification of assets and increasing interest in life insurance and pensions reflect a shift toward long-term planning and financial stability,” added Gerashchenko.

The report found that the Kingdom represents 14.5 percent of the financial wealth in the Middle East and North Africa region, with approximately 21 percent or $100 million originating from ultra-high net worth individuals.

“Saudi Arabia’s success in attracting and retaining high net worth individuals is a testament to its growing economic prowess in the region. UHNW individuals contribute to economic growth and bring increased resources and expertise,” said Dmitry Angarov, managing director and partner at BCG.

On the flip side, the liabilities in the Kingdom are anticipated to grow from $200 billion in 2022 to $400 billion in 2027.

“This balanced growth highlights the Saudi Arabian economy’s calculated risk-taking abilities, potentially fueling further growth in the coming years,” stated the report.

According to the IMF, the Kingdom has sufficient precautionary reserves, and the peg of the exchange rate to the US dollar is serving the Saudi economy well.