Global Islamic Finance Assets Set to Reach $9.7 Trillion by 2029, Report Finds

The global Islamic finance industry is poised for robust expansion, with total assets expected to reach $9.7 trillion by 2029, up from $5.98 trillion at the end of 2024, according to a new joint report by the London Stock Exchange Group (LSEG) and the Islamic Corporation for the Development of the Private Sector (ICD).

The analysis projects an average annual growth rate of 10 percent over the next five years, driven by sustained expansion in Islamic banking, sukuk (Islamic bonds), and takaful (Islamic insurance) markets.

Iran, Saudi Arabia, and Malaysia continue to dominate the global Islamic finance landscape, collectively accounting for $4.3 trillion, or nearly 72 percent, of worldwide assets. Iran leads with $2.24 trillion, followed by Saudi Arabia with $1.31 trillion and Malaysia with $761 billion.

“The industry will be shaped by cross-border connectivity, regulatory advancements, and strategic national initiatives,” said Mustafa Adil, Head of Islamic Finance at LSEG. “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 highlighted the sector’s expanding role in driving sustainable economic growth and promoting financial inclusion, particularly across emerging markets.

The UAE holds Islamic finance assets worth $460 billion, while Kuwait and Qatar possess $198 billion and $192 billion, respectively. Other key markets include Indonesia ($179 billion), Bahrain ($139 billion), Turkiye ($127 billion), and Pakistan ($77 billion).

Despite global economic headwinds, the sukuk market demonstrated resilience, surpassing $1 trillion in outstanding value in 2024. Total sukuk issuance rose 11 percent year-on-year to $254.3 billion, while the value of ESG-linked sukuk exceeded $50 billion, signaling growing integration of sustainability principles into Islamic finance.

Malaysia maintained its leading position in the Islamic Finance Development Indicator, which evaluates performance across financial strength, governance, sustainability, knowledge, and awareness. As of 2024, Islamic financing accounted for 46 percent of Malaysia’s total financing, and its takaful sector made up nearly 24 percent of insurance premiums. The country also represented 36 percent of the global sukuk market.

Saudi Arabia, the UAE, Indonesia, and Pakistan followed Malaysia in the global rankings, while Kuwait, Bahrain, Iran, Qatar, Turkiye, and Bangladesh rounded out the top markets.

Beyond traditional Muslim-majority nations, the report highlighted the United Kingdom as an emerging hub for Islamic finance. Green and sustainable sukuk issuances are gaining traction, supported by the London Stock Exchange’s strong listing framework and the widespread use of English law in international sukuk structures.

According to Fitch Ratings, Islamic banking assets in the UK reached $11.4 billion by the end of 2024, a 38 percent rise from the previous year, while Islamic funds managed over $12.5 billion in assets, reflecting growing investor demand for Shariah-compliant products.