Financial wealth of individuals in Oman grew by a compound annual growth rate of 3.8 per cent annually from 2015 to reach a high of US$64bn in 2020 as the sultanate’s market showed resilience in the face of the protracted COVID-19 pandemic, a global consultancy estimated on Tuesday.
Around 74 per cent of the sultanate’s financial wealth is owned by individuals whose net worth is less than US$5mn, according to a new report by Boston Consulting Group (BCG).
BCG also noted that 49 per cent of Oman’s US$64bn financial wealth is investable wealth.
The report, titled Global Wealth 2021: When Clients Take the Lead, reveals that despite the pandemic’s enduring financial impact, global prosperity and wealth grew significantly throughout the crisis and are likely to continue to expand significantly over the next five years, in line with the emerging economic recovery.
“Oman’s wealth has been favourable over the past five years, demonstrating resilience despite pandemic-related tailwinds, with economic productivity accelerating as per Oman Vision 2040 aspirations. Activities in this direction have encouraged Omani citizens to engage in the global economy, which has, in turn, driven sustained increases in wealth growth,” Mustafa Bosca, managing director and partner at BCG, said.
Oman, which represented three per cent of the GCC’s financial wealth in 2020, is expected to witness strong average annual growth of five per cent in financial wealth to reach US$82bn by 2025, an US$18bn increase from 2020, the BCG report said.
Meanwhile, the GCC region’s financial wealth is forecast to reach US$2.7tn in 2025 from US$2.2tn in 2020.
‘A spotlight on onshore asset allocation shows that equities and investment funds accounted for the largest proportion (55 per cent) of assets in 2020. Looking ahead, the allocation of onshore assets is expected to be similar with equities and investment funds expected to be the largest share of onshore assets in the sultanate, amounting to 54 per cent,’ the BCG report said.
The report also showed Oman’s changing landscape of the wealthy in the coming years, with the rise of the next-generation affluent and high-net-worth clients.
“Greater economic attainment is a primary driver behind Oman’s increased wealth. Looking ahead, wealth demographics will continue to shift, facilitating a subsequent shift in client needs and expectations which compels local wealth managers to ensure their offerings are geared towards local needs or younger wealth segments,” concluded Bosca.