Uncertainty takes its toll on global Islamic finance growth in 2016
Future prospects of capital market, banking and takaful to be driven by higher awareness, government support and larger infrastructure financing needs, analysts say
Increasing demand for Shariah-compliant services and products from a more aware Muslim population supported Islamic banking growth in 2016 but total value of sukuk remained mostly flat as Malaysia reduced short-term borrowings and the GCC states opted to tap liquidity from conventional sources. Growth in takaful also slowed as the market matures.
Overall, however, the Islamic financial landscape is expanding, growing from just over $2 trillion at the end of 2015--a significant milestone--to a forecasted $2.2 trillion for the full year 2016, according to the ICD–Thomson Reuters Islamic Finance Development Report (IFDR) 2016. The sector is expected to grow to $3.54 trillion by 2021, helped by Iran’s fully Shariah-compliant financial market valued at $434 billion entering the global economy after sanctions against the country were lifted in January 2016.
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Yazad Darasha, Media ME