GCC’s wealthy pessimistic over regional economies

Dubai: A significantly larger number of high net worth individuals (HNWIs) from the Gulf Cooperation Council (GCC) region is expecting regional economic conditions to worsen this year, according to the GCC Wealth Insight Report 2016 published by Emirates Investment Bank (EIBank).

 A total of 100 HNWIs were included in the GCC Wealth Insight Survey, of which only 17 per cent said economic conditions are improving compared to 55 per cent in 2015. The survey results show there has also been a fourfold increase in the proportion of HNWIs who say the economic situation in the region is worsening from 9 per cent last year to 36 per cent this year.

 “With the global economy currently going through a period of significant volatility and with depressed oil prices, it comes as no surprise that this year’s report is more sombre than in previous years. However, confidence in markets such as the UAE and Qatar remains very strong and, when taking a longer-term view, HNWI’s say they are optimistic about the Gulf region as a whole,” said Khalid Sifri, CEO of Emirates Investment Bank.

 On global economic conditions, the HNWI sentiment is negative with just 14 per cent saying the current economic situation is improving compared to 31 per cent last year, while almost half (47 per cent) think the situation is getting worse.

 The global economic situation has underperformed expectations from last year’s report, when 52 per cent of investors felt the global economy one year later would be stronger and just 8 per cent believed the situation would get worse. The reality is a definite negative shift in sentiment over the past 12 months.

 The study shows that, while HNWIs are significantly more likely to say that the regional economy is worsening, there is confidence the situation will improve over the long-term, with the majority of HNWIs optimistic about the economic prospects for both the global economy and the GCC region over the next five years.

 Looking at the individual GCC countries, the survey found the most positive responses were from the UAE and Qatar, where 58 per cent and 42 per cent respectively, said they felt the situation was improving compared to 89 per cent and 83 per cent, respectively, in 2015.

 HNWIs were least positive in Kuwait, Bahrain and Saudi Arabia, where just 8 per cent of respondents in each country said they felt the situation was improving. Majority of HNWIs in Oman (67 per cent) are most likely to feel that the economic situation in their country is worsening. Saudi Arabia has seen the biggest shift in sentiment, with 59 per cent of respondents in the 2015 Report saying that they felt their economy was improving.