World Islamic finance belongings are projected to achieve $9.7trillion by 2029, rising at a mean annual charge of 10 per cent, in accordance with the 2025 Islamic Finance Improvement Indicator (IFDI) report. The worldwide benchmark, launched by LSEG in collaboration with the Islamic Company for the Improvement of the Non-public Sector (ICD), assesses the event of the Islamic finance trade throughout 140 nations.
Malaysia maintained its prime place within the world rankings, adopted by Saudi Arabia and the United Arab Emirates. The report highlighted these nations’ continued funding and coverage management in creating their Islamic finance ecosystems. The highest ten was rounded out by Indonesia, Pakistan, Kuwait, Bahrain, Iran, Qatar, Türkiye, and Bangladesh.
Cross-border connectivity and regulatory developments
The report forecasts that the trade’s future shall be formed by cross-border connectivity, regulatory developments, and strategic nationwide initiatives. Governance was recognized as the realm with the best common rating globally, pushed by the implementation of sturdy regulatory frameworks and enhanced disclosure requirements throughout key markets.
Mustafa Adil, head of Islamic finance at LSEG, mentioned: “Wanting forward, the trade shall be formed by cross-border connectivity, regulatory developments, and strategic nationwide initiatives. Primarily based on present trajectories, world Islamic finance belongings are projected to achieve US$9.7trillion by 2029, rising at a mean annual charge of 10%. This underscores Islamic finance’s important position in supporting sustainable financial progress and monetary inclusion globally.”
Khalid Khalafalla, appearing chief govt officer of ICD, added: “The IFDI continues to function a significant benchmark for policymakers and market individuals. It displays the sustained efforts of governments and establishments to create an inclusive and resilient Islamic finance ecosystem, one which helps actual economies and aligns with world improvement goals.”
Sukuk market surpasses $1tn as Islamic banking dominates
The report additionally highlighted the resilience and rising mainstream relevance of the Islamic finance trade. The worldwide sukuk market surpassed $1trillion in excellent worth in 2024, regardless of persistent macroeconomic headwinds. Whole world sukuk issuance for the 12 months reached $254.3billion, an 11 per cent year-on-year enhance.
Sustainability can also be changing into an more and more built-in a part of the sector, with ESG sukuk surpassing $50billion in excellent worth, following $15.4billion in new issuances.
Islamic banking continues to be the dominant section, accounting for 72 per cent of whole trade belongings. The report famous that Islamic banking is increasing its world presence, now working in 84 markets. This contains rising momentum throughout sub-Saharan Africa, the place there at the moment are 104 Islamic banks and home windows working in 28 nations.
The three largest markets for Islamic finance—Iran, Saudi Arabia, and Malaysia—collectively symbolize $4.3trillion, or 72 per cent of whole world Islamic finance belongings.
The Islamic Finance Improvement Indicator is a composite weighted index that assesses the event of the trade throughout 5 key areas: monetary efficiency, governance, sustainability, consciousness, and information.
