- Reem El Shafaki
- Mar 22, 2022
- 2 min read
Updated: Jun 25, 2023
The eight edition of the State of the Global Islamic Economy Report, continues to cover the following sectors: Islamic finance, halal food and beverages, halal cosmetics, halal pharmaceuticals, Muslim-friendly travel, modest fashion, and Islamic-themed media and recreation. The report, which is produced by DinarStandard and is supported by Dubai Islamic Economy Development Centre (DIEDC) addresses developments as well as challenges and opportunities for those sectors pre and post-COVID-19.
This year’s SGIE report estimates that Muslims spent US$2.02 trillion in 2019 on food, pharmaceuticals, cosmetics, modest fashion, travel, and media. While this spending reflects 3.2 percent year-on-year growth, Muslim spending in 2020 is forecast to contract by 8 percent due to the impact of the pandemic. However, spending, excluding travel, is forecast to rebound by end of 2021, and is slated to reach US$2.3 trillion by 2024, at a cumulative annual growth rate (CAGR) of 3.1 percent. Islamic finance assets are estimated to have reached US$2.88 trillion in 2019 and are estimated to remain at the same level in 2020.
In the report’s Global Islamic Economy Indicator that covers 81 countries this year — Malaysia, Saudi Arabia, the UAE, Indonesia, and Jordan lead the rankings. Saudi Arabia and Indonesia moved up in the rankings while Nigeria, Sri Lanka, and Singapore were new entrants to the top 15.
Investments in Islamic economy-relevant companies slowed in 2019/20, following a record year in 2018/19, dropping by 13 percent to US$11.8 billion. Over 54 percent of investments were within the halal products category, while Islamic finance and Islamic lifestyle attracted 41.8 percent and 4 percent of the investments respectively. Such figures reflect corporate-led mergers and acquisitions, venture capital investments in tech start-ups, and private equity investments.
This year’s SGIE Report highlights the emerging opportunities that stand out amidst the repercussions of COVID-19, such as global supply chain disruptions, job losses, health services crises, and food security challenges. The 33 ‘signals of opportunities’ identified in the Report, include the tokenization of sukuks within Islamic fintech and accelerated digital transformations across all sectors prompted by the COVID-19 pandemic. Other signals identified pertain to halal products, supply chain shifts, food security investments, and nutraceutical demand.