The global sukuk market has entered 2026 on a strong footing and is expected to continue serving as a vital funding source for emerging markets. According to a new report by Fitch Ratings, sukuk issuance reached a record high in 2025, exceeding $300 billion across all currencies, reflecting a 25% year-on-year increase.
Sovereign issuers dominated the market, while issuance from banks, corporates, infrastructure, and project finance entities also continued to rise. Fitch anticipates that issuance momentum will persist in 2026, although first-quarter activity may slow due to Ramadan.
The sukuk market remains heavily concentrated in the Gulf Cooperation Council (GCC) countries, as well as Malaysia, Indonesia, Türkiye, and Pakistan. Fitch estimates that sukuk accounted for roughly 16% of all US dollar-denominated debt capital market issuance in emerging markets in 2025, excluding China, up from 12% in 2024.
Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings, said, “We expect global sukuk issuance to sustain momentum in 2026, supported by continued growth in core markets and a rising share in emerging markets.” Despite potential risks arising from geopolitical tensions and evolving Sharia standards, Fitch noted that market fundamentals remain solid.
About 82.5% of rated sukuk are investment-grade, while 90.5% of issuers carry stable outlooks. No sukuk defaults have been recorded over the past four years. Outstanding global sukuk surpassed $1 trillion by the end of 2025, with the share of total debt capital market outstanding particularly high in the GCC (41%), ASEAN (16%), and Türkiye (8%).
Fitch highlighted the Maldives as an emerging area of focus, where an unrated sukuk repayment due in April 2026 may pose challenges. Sukuk now represent 6.6% of the J.P. Morgan Emerging Market Bond Index Global Diversified, supporting passive investment flows from global investors.
Additionally, a weaker US dollar is expected to boost foreign demand for local-currency sukuk in markets such as Malaysia, Indonesia, and Türkiye. In 2025, several new markets advanced their Islamic finance frameworks, including Algeria, Tunisia, Malta, and the Philippines, all introducing sukuk regulations to facilitate issuance and market development.
The report underscores that sukuk will remain a cornerstone of Islamic finance, offering a resilient and increasingly attractive investment class for both sovereign and corporate issuers while supporting economic growth and capital market diversification in emerging economies.
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