Thursday 09 / January / 2025
Muscat: Oman's financial wealth is projected to experience a strong compound annual growth rate (CAGR) of 4.7 percent, increasing to $141 billion by 2027, according to a new report by Boston Consulting Group (BCG).
The report titled ‘Global Wealth Report 2023: Resetting the Course,' reveals that Oman's financial wealth represents 1.5 percent of the region's total. Over the period from 2017 to 2022, Oman's financial wealth experienced a growth rate of 7.2 percent per annum, reaching a total of $112 billion. This significant increase highlights the nation's positive economic trajectory and solidifies its position within the regional financial landscape.
Markus Massi, Managing Director and Senior Partner at BCG said: "Oman's economic trajectory signals entrepreneurial spirit coupled with calculated risk. This impressive growth reflects the resilience and strength of Oman's economy despite global market challenges."
High-net-worth individuals
Turning to individual wealth distribution, the report indicates that in 2022, a significant portion of Oman's wealth, about 23 percent, originated from Ultra High Net Worth (UHNW) individuals worth more than $100 million. Their contribution is expected to increase to 24 percent by 2027. Furthermore, individuals with wealth between $1 million and $20 million held 23 percent of Oman's wealth in 2022, with this percentage expected to remain the same by 2027. Individuals with wealth below $250,000 held 34 percent of the wealth, a proportion anticipated to decrease to 33 percent by 2027.
Farouk El Hosni, BCG Principal, commented: "The success of Oman in retaining high net worth individuals contributes to its growing economic prowess. Not only are they accelerating investment in the region, but they also warrant its sustained growth."
Real assets and liabilities
The report also highlights the growth of real assets in Oman. Oman's real assets represent 0.9 percent of the region's total. However, there has been a decline in real assets from 2017 to 2022 at an annual rate of -3 percent, resulting in a total of $104 billion. Despite this decline, there is optimism for the future as real assets are expected to experience a growth at a rate of 4 percent per annum, reaching $127 billion by 2027.
Additionally, Oman's liabilities sector declined slightly by -0.2 percent per annum from 2017 to 2022, but it is anticipated to grow by 2.5 percent annually to $9.1 billion by 2027. This balanced growth demonstrates Oman's confidence in taking calculated risks, enhancing its overall growth narrative.
Wealth management
When it comes to wealth management, the report provides valuable insights and recommendations for wealth managers to achieve sustainable profitability. Markus Massi emphasised the importance of initiatives such as scalable client acquisition, distinctive private-market offerings, and the integration of new technologies in financial advice to spur revenue generation. Additionally, focusing on reviews, decisions, and tech-based solutions can lead to strategic cost management, streamlining operations, and effectively meeting various client needs.
"To ensure long-term profitability in wealth management, strategic adoption of initiatives like scalable client acquisition, distinctive private-market offerings, and the integration of technical solutions in financial advice can spur revenue generation. By redesigning wealth management with these insights, we can unlock a future of growth, efficiency, and scalability," concluded Markus Massi, Managing Director and Senior Partner at BCG.
