Analyst: GCC is set to push global sukuk issuance to $200bln in 2025

Sustainable sukuk issuances to hit $10-$12bln , says S&P

Global sukuk issuance will reach between $190 billion and $200 billion in 2025, driven by the anticipated growth in the GCC region, a senior S&P Global Ratings analyst said.

Total issuance reached $193.4 billion in 2024, down slightly from the previous year’s $197.8 billion.

Foreign currency-denominated issuance will contribute $70 to $80 billion to this year’s sukuk issuance. The segment saw a 29% rise to $72.7 billion in 2024.

Saudi Arabia and Kuwait led the way, with banks, corporations and the Saudi government stepping up their foreign-currency issuance, said S&P Global Ratings Islamic Finance Head Mohamed Damak.

In addition, banks and corporations in Qatar and Oman were more active. However, the UAE ended 2024 with marginally lower foreign currency sukuk issuance than last year.

«We expect foreign currency-denominated issuance to remain elevated in 2025,» said Damak.

The total volume of sustainable sukuk issuance hit $11.9 billion in 2024, compared to $11.4 billion in 2023. The Middle East accounted for about 25-30% of total sustainable issuance.

«We expect the issuance volume of sustainable sukuk to hover at approximately $10 to $12 billion in 2025, in the absence of any major acceleration in implementing net zero policies by core Islamic finance countries or regulatory action,» Damak said.

S&P believes that the potential impact of adopting Standard 62 of the Accounting and Auditing Organization for the Islamic Financial Institutions will come in 2026 as the organisation continues receiving market feedback.