Prime Highlights:
Global sukuk issuance in 2025 projected to range from $190 billion to $200 billion.
Foreign-currency denominated sukuk issuance grew by 29% in 2024, totaling $72.7 billion.
Saudi Arabia and Malaysia are key drivers of foreign-currency sukuk issuances.
S&P Global expects continued strength in foreign-currency sukuk in 2025.
Key Background:
Global sukuk issuance is poised to hit between $190 billion and $200 billion in 2025, with key markets such as Saudi Arabia and Indonesia contributing significantly to the growth, according to a recent analysis by S&P Global. This projection follows a slight decline in total sukuk issuance from $197.8 billion in 2023 to $193.4 billion in 2024. However, the sukuk market saw a remarkable 29% year-on-year increase in foreign-currency denominated sukuk, reaching $72.7 billion last year.
S&P Global’s report highlights that Malaysia and Gulf Cooperation Council (GCC) nations, especially Saudi Arabia, are the primary contributors to the surge in foreign-currency denominated sukuk. Sukuk, a Shariah-compliant financial instrument, offers investors partial ownership in an issuer’s assets while adhering to Islamic finance principles.
Despite a slight decrease in total issuance, foreign-currency sukuk is expected to remain robust in 2025, driven by favorable market conditions and significant financing needs for economic diversification in Islamic finance core markets. Moreover, S&P Global anticipates that the pace of monetary easing will slow, contributing to ongoing demand for sukuk.
The report also notes that geopolitical tensions will likely have minimal impact on sukuk issuance in 2025, as long as global liquidity and regional economic performance remain stable. Furthermore, S&P Global cautioned that the implementation of new Shariah standards in 2026 could lead to significant changes in the sukuk market structure, though their impact is expected to be more apparent after 2026. As the sukuk market continues to evolve, experts remain attentive to regulatory developments and geopolitical factors that could influence the global financial landscape.