Global Sukuk Issuance Is Set To Increase In 2021

Market conditions should remain buoyant throughout 2021, with record-low interest rates and abundant liquidity. S&P Global Ratings forecasts total sukuk issuance of about $140 billion–$155 billion this year, thanks to a recovery in issuance in Malaysia, Indonesia, and the Gulf Cooperation Council (GCC) countries. This compares with a drop in issuance to $139.8 billion in 2020 from $167.3 billion a year earlier.

We expect GDP growth in the core Islamic finance countries--the GCC countries, Malaysia, Indonesia, and Turkey--to recover from a sharp recession in 2020. We also assume that the price of oil will stabilize at about $50 per barrel in 2021. Together, these factors underpin a stronger performance by the global sukuk market in 2021 than in 2020.

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