GCC’s Rich Confident About Local Economies Despite Oil Price Fall

The majority of GCC’s high net worth individuals (HNWIs) are more optimistic about the economic situation in the region than global growth prospects, a new survey showed.

According to a report by Emirates Investment Bank, almost 55 per cent of those polled said that the economic condition in the Gulf was improving compared to just 31 per cent who were optimistic about the global economy.

HNWIs are defined as individuals with $2 million or more in investable assets.

The survey was conducted among GCC’s HNWIs in the fourth quarter of 2014, a period characterised by falling oil prices.

Respondents were also cautious about global economic growth with 29 per cent saying that the global economy is worsening.

However, the Gulf’s HNWIs were all optimistic about the long term prospects for the Gulf region and the global economy, the report noted.

Around 86 per cent of those polled said that they are somewhat or very optimistic about prospects for the Gulf region over the next five years.

Almost 78 per cent echoed similar sentiments about the revival of growth globally.

In line with their confidence in the region’s growth, around 83 per cent HNWIs preferred to invest locally, up 19 per cent from last year.

HNWIs confidence in the stability of the regional economies and the need for more personal control over their investments are some of the factors that encourage them to keep their assets closer to home, the report said.

“While views of the global economy are more negative than last year, with respondents in this year’s survey almost twice as likely to say the situation is worsening, HNWIs are keen to continue growing their wealth and remain optimistic about future prospects globally and in the Gulf region in particular,” said Khaled Sifri, CEO of Emirates Investment Bank.

“There are strong signs of moving beyond the days of the financial crisis, albeit with a more cautious and perhaps more regional investment approach.

“We believe that the continued growth-focused attitude of regional entrepreneurs reinforces the positive outlook for the GCC region and global economy in the coming years.”

Despite oil’s bearish run in the market, Gulf economies are expected to continue their growth, aided by government spending and private sector activity, a recent poll of economists by Reuters showed.

Saudi Arabia, the GCC’s biggest economy, is estimated to expand 3.2 per cent this year while the UAE is set for a growth of 3.8 per cent.