Middle East sees rise in millionaires in 2011 despite Arab Spring

According to BCG's new report, The Battle to Regain Strength: Global Wealth 2012, private financial wealth in the Middle East and Africa grew to $4.5 trillion in 2011, up from $4.3 trillion in 2010, marking a 4.7% increase. Furthermore, it is expected to grow by a compound annual growth rate of 6.6% by 2016, to reach $6.1 trillion, largely as a result of continued strong GDP expansion in oil-rich countries.

"We see this growth despite the fact that Middle Eastern and African stock markets suffered from the political instability caused by the uprisings across the Arab world in 2011," said Dr. Sven-Olaf Vathje, Partner and Managing Director at BCG Middle East. "Despite this, the region's private wealth grew in 2011 driven by high savings rates and strong economic growth in commodity-rich countries such as Saudi Arabia and Qatar. The wealth held in bonds rose by 13.3%, and cash and deposits grew by 5.1% - only the amount of wealth held in equities decreased by 2.6%, mostly driven by weak market performance."

The BCG study also estimates that between 2011 and 2016, private financial wealth in the region will grow by a CAGR of 8% for households worth more than $100m, 8% for households worth between $1-$100m and 5% for households worth less than $1m.

"In 2011, Qatar, Kuwait, UAE and Bahrain were among the top ten countries in the world by proportion of millionaire households," Markus Massi, Partner and Managing Director at BCG Middle East added. "Qatar stood at second place with 14.3% millionaire households; Kuwait came in third (11.8%); the UAE came in sixth (5%); and Bahrain stood at tenth place (3.2%)."

In terms of proportion of $100m-plus, ultra-high-net-worth (UHNW) households, Kuwait and Qatar each had 6 UHNW households per 100,000 households, while the UAE had 4 UHNW households per 100,000 households.

For private financial wealth originating from Middle East and Africa in 2011, Switzerland was the biggest offshore centre attracting $0.56 trillion, followed by the UK drawing $0.33 trillion.

In fact, with over a third of all assets booked abroad in 2011, Middle East and Africa had the highest proportion of offshore wealth in the world. In terms of percentage of private wealth booked offshore, Saudi Arabia (65%) took the lead in the region, followed by Kuwait (53%), UAE (52%), Tunisia (45%), Bahrain (37%), Lebanon (34%) and Morocco (30%).

As a regional offshore financial center Dubai held assets worth $0.2 trillion with Saudi Arabia, Kuwait, India, Iran and Turkey as the top five sources of offshore wealth.

From a global perspective, although the number of millionaire households decreased by a combined 182,000 in the US and Japan, the number grew by 175,000 worldwide as many households crossed the millionaire threshold in developing economies.

However, the US still had the largest number of millionaire households (5.1 million), followed by Japan (1.6 million) and China (1.4 million).

The highest density of millionaire households in 2011 was in Singapore, where more than 17% of all households have private wealth of $1m or higher.