RIYADH: Global Islamic finance assets are projected to climb to $9.7 trillion by 2029, up from $5.98 trillion at the end of 2024, driven by expanding banking, sukuk, and takaful markets, a new analysis showed.
According to a report from the London Stock Exchange Group and the Islamic Corporation for the Development of the Private Sector, a member of the Islamic Development Bank, the outlook implies an average annual growth rate of 10 percent over the five-year period.
The report shows that Iran, Saudi Arabia, and Malaysia account for $4.3 trillion, or about 72 percent, of total Islamic finance assets worldwide. Iran leads with $2.24 trillion, followed by Saudi Arabia with $1.31 trillion and Malaysia with $761 billion.
In April, a report from S&P Global highlighted Saudi Arabia’s pivotal role in driving global Islamic finance growth in 2025, supported by non-oil economic expansion and strong sukuk issuance.
Mustafa Adil, head of Islamic Finance at LSEG, said: “Looking ahead, the industry will be shaped by cross-border connectivity, regulatory advancements, and strategic national initiatives.”
He added: “Based on current trajectories, global Islamic finance assets are projected to reach $9.7 trillion by 2029, growing at an average annual rate of 10 percent.”
Adil noted that the figures underscore the sector’s “vital role in supporting sustainable economic growth and financial inclusion globally.”
The UAE has Islamic assets amounting to $460 billion, while Kuwait and Qatar possess holdings worth $198 billion and $192 billion, respectively.
Indonesia has Islamic finance assets totaling $179 billion, followed by Bahrain at $139 billion, Turkiye at $127 billion, and Pakistan at $77 billion by the end of 2024.
LSEG added that the global sukuk market surpassed $1 trillion in outstanding value in 2024, despite persistent macroeconomic headwinds.
Total global sukuk issuance reached $254.3 billion, up 11 percent year on year by the end of 2024.
ESG sukuk surpassed $50 billion in outstanding value, with $15.4 billion in new issuances, marking the increasing integration of sustainability into Islamic finance.
Malaysia retains top spot
Malaysia ranked first in the Islamic Finance Development Indicator, which is compiled based on several metrics, including financial performance, governance, sustainability, knowledge, and awareness.
“As of 2024, Islamic financing accounts for over 46 percent of Malaysia’s total financing, while the Takaful sector accounts for nearly 24 percent of industry premiums,” stated LSEG.
It added: “Malaysia also accounts for a 36 percent share of outstanding global sukuk. These figures underscore the sector’s vitality.”
Malaysia was followed by Saudi Arabia, the UAE, Indonesia, and Pakistan in the rankings.
Kuwait, Bahrain, and Iran, as well as Qatar, Turkiye, and Bangladesh, completed the top rankings, collectively representing the most advanced and diversified Islamic finance markets worldwide.
Widening landscape
Muslim-majority countries in the Middle East and Southeast Asia continue to dominate the industry, although growth in other markets persists, largely due to the intrinsically ethical nature of Shariah-compliant finance.
The report revealed that the UK has now emerged as a key hub for Islamic finance, where green and sustainable sukuk are gaining traction.
In August, a report by Fitch Ratings echoed similar views, noting that the UK will continue as the leading Western hub for Islamic finance, supported by the London Stock Exchange serving as a key listing venue for global US dollar sukuk and by the use of English law in governing most international sukuk.
The credit rating agency, citing data from IFN Investor, further said that UK-based Islamic funds are the largest contributors to the domestic Islamic finance industry, with assets under management of over $12.5 billion as of end-June 2025, up 22.1 percent year on year.
By the end of 2024, Islamic banking assets in the UK reached $11.4 billion, representing a 38 percent rise compared to the previous year.
