Global: Islamic finance market set to almost double to US$3.25 tln by 2020 - Thomson Reuters
Source: Middle East Insurance Review | Nov 2015
The world Islamic finance market is set to almost double by 2020 from the current US$1.81 trillion to $3.25 trillion, according to the “State of Global Islamic Economy 2015/16” report by Thomson Reuters.
The growth is fuelled by takaful and banking, which have grown 10% and 12% respectively, while sukuk and funds witnessed modest growth of 6% and 7% respectively.
However, continued significant macroeconomic and geopolitical risks do not augur well for Islamic finance sector. Economically many countries like Indonesia and Turkey remain fairly exposed to this damaging trifecta of low real sector growth, reduced capital inflows and expected interest rate increases in the US.
Falling oil prices present a broader dilemma for various Islamic countries, on how they would maintain their long-term public spending without impacting its fiscal sustainability.
There are also other challenges. Mr Mustafa Adel, Acting Head of Islamic Finance at Thomson Reuters said: “Companies are not able to tap the global Muslim market because standards and regulations vary significantly. That obviously is a challenge, but there is a huge opportunity as well that exist within that. Countries in the ASEAN and GCC regions are looking to develop a single standardised structure, so with that companies would be able to achieve the economies of scale.”