Global Islamic finance assets are projected to reach $9.7trillion by 2029, growing at an average annual rate of 10 per cent, according to the 2025 Islamic Finance Development Indicator (IFDI) report. The global benchmark, released by LSEG in collaboration with the Islamic Corporation for the Development of the Private Sector (ICD), assesses the development of the Islamic finance industry across 140 countries.
Malaysia maintained its top position in the global rankings, followed by Saudi Arabia and the United Arab Emirates. The report highlighted these countries’ continued investment and policy leadership in developing their Islamic finance ecosystems. The top ten was rounded out by Indonesia, Pakistan, Kuwait, Bahrain, Iran, Qatar, Türkiye, and Bangladesh.
Cross-border connectivity and regulatory advancements
The report forecasts that the industry’s future will be shaped by cross-border connectivity, regulatory advancements, and strategic national initiatives. Governance was identified as the area with the highest average score globally, driven by the implementation of robust regulatory frameworks and enhanced disclosure standards across key markets.
Mustafa Adil, head of Islamic finance at LSEG, said: “Looking ahead, the industry will be shaped by cross-border connectivity, regulatory advancements, and strategic national initiatives. Based on current trajectories, global Islamic finance assets are projected to reach US$9.7trillion by 2029, growing at an average annual rate of 10%. This underscores Islamic finance’s vital role in supporting sustainable economic growth and financial inclusion globally.”
Khalid Khalafalla, acting chief executive officer of ICD, added: “The IFDI continues to serve as a vital benchmark for policymakers and market participants. It reflects the sustained efforts of governments and institutions to create an inclusive and resilient Islamic finance ecosystem, one that supports real economies and aligns with global development objectives.”
Sukuk market surpasses $1tn as Islamic banking dominates
The report also highlighted the resilience and growing mainstream relevance of the Islamic finance industry. The global sukuk market surpassed $1trillion in outstanding value in 2024, despite persistent macroeconomic headwinds. Total global sukuk issuance for the year reached $254.3billion, an 11 per cent year-on-year increase.
Sustainability is also becoming an increasingly integrated part of the sector, with ESG sukuk surpassing $50billion in outstanding value, following $15.4billion in new issuances.
Islamic banking continues to be the dominant segment, accounting for 72 per cent of total industry assets. The report noted that Islamic banking is expanding its global presence, now operating in 84 markets. This includes growing momentum across sub-Saharan Africa, where there are now 104 Islamic banks and windows operating in 28 countries.
The three largest markets for Islamic finance—Iran, Saudi Arabia, and Malaysia—collectively represent $4.3trillion, or 72 per cent of total global Islamic finance assets.
The Islamic Finance Development Indicator is a composite weighted index that assesses the development of the industry across five key areas: financial performance, governance, sustainability, awareness, and knowledge.
