More than two thirds (71%) of expatriates in the Middle East feel they are ‘better off' than they were 12 months ago, according to new research by Hoxton Capital Management and PSS Removals.
The ‘Worldwide Wealth Survey 2023' targeted a global audience of expatriates at the end of Q1 to gauge the financial positions of expatriates and understand their perceptions regarding their economic and lifestyle circumstances compared to the previous year.
Hoxton said approximately 50,000 participants were invited to take part.
One key question "Do you feel that you are in a better or worse position financially than 12 months ago?" revealed that globally 50% of respondents reported feeling better, 41% stated feeling worse, while the remaining participants indicated no significant change in their financial position.
This positive sentiment can be attributed to various factors, such as an increase in job opportunities, promotions, salary raises, or successful investments, Hoxton said, adding that economic growth in certain regions, improved market conditions and the slight recovery from the global financial uncertainties experienced in recent years also contributed to this optimistic outlook.
Respondents to the survey were asked, in a multiple-choice question, to be specific on where they had seen the most positive impact on their finances stem from.
Globally, 53% cited salary increases as a key factor (20% of respondents had changed jobs to achieve that), whilst 26% said the performance of their investment portfolio had a big positive impact.
Within their portfolio, Property investments were specifically cited by some 19% of the audience, whilst growth on long-term & retirement investments (pensions) was a key element for 21%.
When interpreting these results, it is crucial to consider the diversity of expatriates' backgrounds and their countries of residence. Different economic environments, currency exchange rates, and the availability of resources can greatly influence individuals' financial circumstances.
Therefore, while 50% of respondents reported feeling better off overall, the experiences of expatriates in specific countries differ significantly.
Europe: A mixed bag
According to the survey, 47% of expatriates residing in Europe reported feeling better off financially compared to the previous year.
This response indicates a generally positive sentiment among expatriates in the region. However, it is important to note that the remaining 53% expressed varying degrees of dissatisfaction or stagnation in their financial positions.
The economic landscape in Europe varies significantly across countries, impacting expatriates' financial well-being. Factors such as employment opportunities, currency exchange rates, and cost of living play a crucial role in shaping their financial perceptions.
Countries experiencing economic growth and stability contributed to the positive responses, while others facing challenges like political uncertainties or high living costs influenced the negative sentiments.
Australia: balanced perceptions
In Australia, the survey revealed a more balanced perception of expatriates' financial positions.
Approximately 48% of respondents indicated feeling better off than last year, while the remaining 52% expressed neutral or negative sentiments. The country's strong economy, attractive job market, and high living standards contributed to the positive outlook of expatriates.
However, it is worth noting that economic factors such as inflation, housing costs, and changing market dynamics have impacted some expatriates' financial well-being in Australia. Factors like these explain why many respondents did not report an improvement in their financial situation.
United States: challenging times
The survey results showed that only 41% of expatriates residing in the United States felt they were in a better financial position compared to the previous year. This relatively lower percentage may be attributed to the complexities of the U.S. economy, which can present challenges for expatriates.
While the United States offers numerous job opportunities and a robust financial market, expatriates may face high living costs, healthcare expenses, and taxation complexities. Economic fluctuations and uncertainties have also influenced expatriates' financial stability, contributing to a more cautious approach to their financial outlook.
United Arab Emirates: a 'remarkable response'
In contrast to the trends observed in other regions, the survey results from the UAE showcased an exceptional level of optimism. A staggering 69% of expatriates in the UAE reported feeling better off financially compared to the previous year. This high response rate reflects the UAE's position as an economic hub, attracting expatriates with promising job prospects, tax benefits, and a flourishing business environment.
The UAE's strategic geographic location, diverse economy, and visionary policies have created a favourable environment for expatriates seeking financial growth. Expatriates in the UAE have benefited from employment opportunities in sectors such as finance, technology, real estate, and hospitality, leading to their positive perceptions regarding their financial situations.
GCC Countries: An Overall Positive Outlook
When analysing the data collected from the GCC countries, including the UAE, Oman, Saudi Arabia, Bahrain, Qatar, and Kuwait, a remarkable 71% of expatriates reported feeling better off financially compared to the previous year. This high response rate highlights the overall positive outlook among expatriates in this region.
The GCC countries have witnessed significant economic development and investment in recent years, providing expatriates with a range of opportunities for career growth and financial prosperity. Expatriates in these countries often benefit from attractive salary packages, tax advantages, and a favourable business climate. These factors contributed to the overwhelmingly positive sentiment expressed by expatriates in the GCC countries.
Alan Turner, marketing director at Hoxton Capital said: "It's interesting to delve into the data across regions, and there is a clear trend of economic prosperity in the middle east vs one of consolidation and balanced optimism in some of the other regions.
"Some countries in the middle east, such as the UAE, where I am based, have seen increased inflows of expats in the last year, and, whilst some of that can be attributed to geo-political reasons, for the most part, those people are coming here because it is a growing economy and because their personal net economic position here is going to be stronger than it was in their home country."
Chris Ball, managing partner of Hoxton Capital: "The last 12 months have not been easy financially for everyone. However, amidst the ever-changing landscape of global finance, the expatriates in the GCC region have spoken with a resounding majority: 71% report feeling better off financially than they did the previous year. This serves as a powerful reminder that, with diligence and careful planning, financial success is within reach for all of us."
Examining the negative responses
Conversely, the survey reveals that 41% of respondents felt they were in a worse financial position compared to the previous year.
This subgroup of expatriates may have faced challenges such as economic downturns, job losses, increased living costs, or unfavourable exchange rates. Global events such as political instability, natural disasters, or economic crises significantly impact expatriates' financial stability, contributing to any pessimistic perception.
Furthermore, changes in government policies, tax regulations, or social welfare systems also affect expatriates' financial well-being. These factors can lead to uncertainty and will in part, explain why a substantial portion of respondents expressed a decline in their financial situation.
Stagnant financial position
The remaining respondents who reported no significant change in their financial position may indicate stability rather than stagnation. Economic circumstances vary from person to person, and factors such as inflation, market performance, and personal financial management decisions play a role in maintaining stability. While not experiencing improvements or declines, this group may have successfully maintained their existing financial situation.
Hoxton concluded that the survey underscores the importance of recognising the diverse experiences of expatriates, as economic circumstances vary greatly depending on the country of residence and personal situations.
"By gaining a deeper understanding of expatriates' financial positions, policymakers, financial institutions, and individuals can make informed decisions to enhance financial well-being and overcome this unique demographic's challenges", it said.
