Islamic Finance and Economic Growth Mutually Reinforcing

2014 saw global Islamic finance spur economic growth in many jurisdictions, including beyond the traditional Islamic economies, spurring the industry to greater heights. In advanced European economies the sukuk market became an attractive source of fund-raising among governments who needed to explore wider options from more competitive sources, and to establish themselves in the sukuk market to pave the way for corporate issuances in the future. European economies are also active in Islamic capital markets as investors in foreign sukuk, from GCC countries among others, and as a home to Islamic asset management funds. In South East Asia a diverse range of sectors utilising Islamic banking and sukuk have attracted record demand. The Islamic banking sector in Malaysia is set to transition into a more sophisticated market, spurred by evolving and forward-looking regulatory changes. In Africa the core principles that underpin Islamic finance – risk-sharing, maximising profits, minimising inequality – is supporting of real and sustainable economic activity. Apart from the sukuk market, several African countries benefitted from Islamic loan facilities for infrastructure development and other economic programmes.

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