Global Sukuk Issuance Expected to Reach $280 Billion in 2026, Driven by GCC Funding Needs

Global sukuk issuance is set to rise to between $270 billion and $280 billion in 2026, following $264.8 billion in 2025 and $234.9 billion in 2024, according to S&P Global. The firm attributed the growth to lower oil prices, financing requirements in some Gulf Cooperation Council (GCC) countries, and the Federal Reserve’s expected continuation of monetary easing.

Sukuk are Shariah-compliant financial instruments that grant investors partial ownership in an issuer’s underlying assets and offer an alternative to conventional bonds.

Earlier in January, Fitch Ratings projected steady issuance momentum this year, citing GCC nations’ efforts to diversify funding sources and upcoming debt maturities across sovereigns, financial institutions, and corporates.

S&P Global said issuance in 2026 will continue increasing unless global markets experience major volatility or geopolitical risks spike unexpectedly. The report highlighted strong economic performance in countries such as Saudi Arabia and the UAE, which, along with supportive market conditions, will underpin sukuk growth.

New entrants to the market are also expected to boost overall issuance. Egypt, for example, issued $2.5 billion of sukuk in 2025, and additional countries may tap the market this year to broaden their investor base and access competitive financing.

Regional analyses point to elevated debt activity in the GCC over the next five years, led by Saudi Arabia and the UAE. Kamco Invest noted that fiscal deficits in some countries will drive higher issuance, while corporate sukuk activity is also expected to rise in the UAE and Qatar.

In 2025, global sukuk issuance grew 12.7 percent, supported by Malaysia, Saudi Arabia, Turkiye, the UAE, and Bahrain. Foreign currency-denominated issuance surpassed $100 billion, nearly double 2021 levels. Malaysia was the largest contributor, benefiting from strong local market depth and foreign currency issuance via the International Islamic Liquidity Management Corp.

Saudi Arabia issued $72.5 billion in sukuk last year, including $38 billion in foreign currency. Domestic issuance declined slightly, reflecting reduced government and private sector activity. Saudi banks issued over $15 billion to support Vision 2030 projects. In the UAE, issuances reached $22.1 billion, of which $19 billion were foreign currency, with real estate developers in Dubai among the top issuers.

Turkiye saw growth in local-currency sukuk, including a $600 million corporate issuance by Turk Telecom in November.

S&P Global noted that the implementation of AAOIFI’s Shariah Standard 62 is unlikely to affect 2026 performance, as the standard remains under revision and the timeline for adoption is uncertain.

Sustainable sukuk also gained traction, rising 38 percent to $21.5 billion in 2025. Financial institutions, including the Islamic Development Bank, accounted for almost half of the increase, while Saudi issuers led the region in sustainable issuance, followed by the UAE and Malaysia. These sukuk finance environmentally sustainable projects, including renewable energy, clean transportation, and climate-resilient infrastructure.