Doha, Qatar: The Islamic finance industry is expected to see positive growth this year. Qatar has been cementing its position as leader in the Islamic finance by leveraging robust regulatory framework and innovative financial solutions.
Strong banking and sukuk industry performance led to 10.6 percent growth for the global Islamic finance industry in last year. The total sukuk outstanding surpassed $1 trillion for the first time, S&P Global Ratings said in a report recently.
In 2025, amid increased uncertainty, positive growth in the industry will continue. “We expect $10bn to $12bn in sustainable issuance in 2025 and continue to think it could drive future growth, although short-term performance might be lower than our initial expectations.”
In GCC countries, “we expect growth to continue thanks to reforms in Oman, Bahrain, and Kuwait, as well as anticipated increases in gas production in Qatar”, the report noted.
“We expect economic growth in Saudi Arabia and the UAE will continue supporting Islamic banking asset expansion in 2025, barring any significant disruptions from global trade tensions or a further decline in oil prices. In the UAE, the non-oil economy’s performance, along with capital expenditure needs across various sectors will further support financing requirements and sukuk issuances in 2025, assuming current market volatility does not have a major impact.
As the sector grows rapidly, it is supported by cutting-edge technologies and a strong commitment to ethical investment practices. Qatar has become a hub for Islamic financial services in the region and beyond and has played a proactive role in shaping global Islamic finance trends, combined with its stable economic environment.
Recently, Qatar hosted the 11th edition of the Doha Islamic Finance Conference with the theme ‘Integration of Blockchain and AI: The Future of Islamic Finance’. The conference highlighted fintech’s transformative influence on Islamic banking with AI and blockchain technology playing central roles in this shift.
“We anticipate an increase in sustainable sukuk issuance when GCC issuers implement climate transition plans more quickly and make progress toward renewable energy targets, particularly if regulators offer incentives for sustainable issuance. The drop in oil prices could further facilitate this transition, although we think GCC sovereigns possess competitive advantages, such as low extraction costs and the capacity to increase production capacity,” the report stated.
It added, “We also expect GCC banks to continue supporting their respective government’s climate transition goals. We expect the sustainable sukuk market to continue attracting interest from more countries as they seek to access diverse funding sources to finance their sustainability agenda.”
