Bloomberg: The recovery of the Saudi economy is out of the ordinary, as domestic spending is increasing, and the economy is growing faster than expect

[The SC]

The world's largest oil exporter has greeted Covid-19 with one of the most silent aid packages of the G20.
Instead, it has tripled the value-added tax to shore up its finances and reduce the size of the program to help the poorest. The austerity approach has sparked predictions of a long-term slowdown.

However, high oil prices and an accelerated vaccination campaign led to a recovery of the economy .. It was motivated by Saudis spending their holidays in their home.

Goldman Sachs Group Inc. raised Its forecast for GDP growth to 4.5% this year, compared to 2.5% previously.

Significant growth of financial wealth in the Kingdom of Saudi Arabia amounting to one trillion US dollars.. Despite the challenges posed by the epidemic .. 57% of Saudis’ wealth belongs to individuals whose wealth exceeds $5 million each..

https://twitter.com/x/status/1424241901243355138

The new annual global wealth management report released by the Boston Consulting Group revealed that the compound annual growth rate of financial wealth in the Kingdom of Saudi Arabia has witnessed an annual growth rate of 4.1% since 2015, reaching $1 trillion in 2020, of which 84% is in the wealth category available for investment, at a time when the Saudi market has shown exceptional resilience in the face of the ongoing covid-19 pandemic.

The report, titled “Global Wealth 2021: When Customers Take the Leadership,” provided a comprehensive view of the sector, taking into account that despite the spread of the epidemic and its remarkable financial effects, financial prosperity and wealth are witnessing exceptional growth despite the relatively prolonged crisis, with the expectation that growth will continue over the years. The next five, in the footsteps of the global economic recovery.

“Despite the challenges posed by the recent spread of the COVID-19 pandemic on a global level, it is estimated that the Kingdom of Saudi Arabia was able to record strong growth in the wealth sector,” said Mustafa Boska, managing director and partner at Boston Consulting Group.

He added: "The Kingdom’s Vision 2030 is considered the main factor that contributed to enhancing the level of productivity, and thus enabling Saudi investors to participate in the global economy more than ever before, which led to a remarkable growth in the wealth sector, despite the multiple economic crises that the world has witnessed since last year”

The report indicates that the Kingdom accounted for 45% of the share of financial wealth in the Gulf Cooperation Council countries in 2020, while the compound annual growth rate of its financial wealth is expected to witness a remarkable growth of 4.2% to reach $1.2 trillion by 2025, an increase of $200 billion.

On the other hand, the report expected that the volume of financial wealth in the region by 2025 would reach $2.7 trillion, compared to 2.2 trillion in 2020.

Currencies and deposits accounted for the highest percentage of the internally managed assets category in the Kingdom, as this category accounted for 44% of the total wealth in 2020, while the category of stocks and investment funds is expected to constitute the largest share of internal assets, reaching 45% of the total local assets in The kingdom.

Changing the general landscape of wealth in the Kingdom of Saudi Arabia:

The Boston Consulting Group report expects that the reality of wealth in the Kingdom will witness remarkable changes in the coming years, with the rise of the next generation of high net worth individuals. According to the report, these high net worth individuals, aged between 20 and 50 years, have longer investment horizons, greater risk audacity, and a willingness to invest their wealth to make a positive societal impact and generate strong returns. However, the challenge in this context is the unwillingness of the largest number of wealth managers to provide their services to these new clients.

Bosca added: “The unprecedented economic achievements have contributed to an increase in the number of wealthy people in the Kingdom of Saudi Arabia, thanks to the spread of wealth more and more among the members of society. Customers' expectations and needs are expected to witness drastic changes, coinciding with the shifts in the structure of wealth distribution. This requires wealth managers to provide new offers that suit local needs and are in line with the aspirations of the wealthy segments of young people.”

The report suggests wealth managers should adopt a bold new digital business model, to attract the new class of the next generation of the wealthy. The five pillars of the new digital model include:

• Relationship management with exceptional performance and professionalism: Implementing all routine procedures by adopting modern technologies, and managing relationships in an advanced manner, to become the main factor contributing to supporting the digital transformation path.

• Adopting a contextual and applicable learning methodology: using simple, enjoyable and fully digital content, with a targeted strategic structure that contributes to advancing the digital transformation process.

• Designing user experiences smarter: Providing customized and easy-to-use platforms, with tools and simulations that enhance customer experiences in a fun and simplified framework.

• Adoption of the simplified pricing model: Develop a hybrid model that combines asset-based pricing with a fixed subscription fee.

• Facilitate investment in “luxury” sectors: Create customizable mandates that allow wealth managers to operate at their own discretion, limiting products to ultra-high net worth individuals.


https://www.bloomberg.com/news/arti...low-organic&cmpid=socialflow-twitter-business

 

[Battlion25]

Could it be because of them being open handed in shopping big but the covid period prevented them from going out much hence lead to a surplus increase in their pockets