Today's Edition
KHALED AL KHAWALDEH (ABU DHABI)
The outlook for household wealth in the UAE remains positive despite ongoing regional tensions, according to Paul Donovan, Chief Economist at UBS Global Wealth Management.
Speaking at the release of the UBS Global Wealth Report 2025, Donovan underscored that the impact of the regional conflict on the UAE's wealth trajectory is expected to be limited.
"The conflict is obviously a human tragedy. We are seeing a great deal of suffering as it unfolds," Donovan told Aletihad on Wednesday.
"However, it is primarily a localised conflict, and at a global level, the economic and financial market implications to date have been very muted. I think that is likely to continue."
Donovan emphasised that while geopolitical tensions can cause short-term volatility in asset prices, they are unlikely to derail the UAE's medium-term wealth creation, which, according to UBS data, has been substantial in the last decade.
"I would not be expecting a great deal of disruption to the local economies in the UAE if we see an extended period of conflict," he noted.
"There may be some implications for, say, the tourism industry, but it's unlikely to lead to a dramatic shift in terms of the medium-term direction of the economy and the wealth creation that is going on there."
One factor Donovan pointed out is the limited movement in oil prices despite the conflict. He said the sector had proven to be resilient and believed the UAE would continue to benefit economically under the current trajectory of the conflict.
"The movement in the oil price has been a positive movement, but a fairly limited movement," he said.
"We're not seeing significant disruption at the moment. The expectation is that there will not be any threats over the Straits of Hormuz. In that situation, again, I don't see this as having a significant medium-term impact," he said.
The UBS Global Wealth Report 2025, released on Wednesday, highlights strong underlying fundamentals in the UAE's wealth landscape. According to the report, the UAE has seen significant growth in median household wealth since 2020, with median wealth per adult rising by more than 23% after adjusting for inflation. However, average wealth per adult grew more modestly at just 2.35% over the same period, suggesting a more polarised distribution of wealth gains compared to neighbouring Saudi Arabia and other economies.
The report shows that about 62% of the UAE's gross wealth is held in financial assets, while non-financial assets such as property account for roughly 48%. Debt levels remain modest, at around 9% of gross wealth.
The number of dollar millionaires in the UAE also continued to rise in 2024, reaching over 240,000 individuals. The country added 13,000 in the last year, the second largest rate of growth, just behind Türkiye.
Globally, the report found that household wealth rose again in 2024, following a buoyant 2023, although growth was uneven across regions. North America and China remain dominant, jointly accounting for over half of the total personal wealth in the UBS study's 56-country sample. The report also noted the rise of the so-called EMILLIs, everyday millionaires with between $1 million and $5 million in assets, a group that has quadrupled globally since 2000, largely on the back of inflated real estate values.
Looking ahead, UBS expects the global millionaire population to increase by nearly 9% by 2029, adding over five million new millionaires. The UAE is poised to contribute to this growth, fuelled by its economic diversification efforts and prudent wealth management practices.
