First News
Volume:8, Number:02
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Business & Finance 2

Despite Challenges, Islamic Finance Industry Set to Sustain Growth

The global USD2-trillion Islamic finance industry will continue to expand this year, but lose some momentum in 2018. In the GCC, however, the slowdown at Islamic banks will persist in 2017 after asset growth declined to 5.3 percent in 2016 from 10.7 percent in 2014, analysts said. Industry experts think Islamic finance sector growth rate will stabilize at about five percent in 2017 and 2018, which is lower than the average over the past decade. The Islamic finance industry's assets reached USD2 trillion at year-end 2016, although slightly below S&P Global Ratings' September forecast. Analysts believe that the drop in oil prices and governments' cuts to investment and current spending have reduced the industry's growth prospects. While Malaysia's economy continued to perform adequately, thanks to its diversification, the average growth rate in the GCC dropped significantly between 2012 and 2017. Iran, on the other hand, experienced a growth spurt in 2016 after certain sanctions were lifted and the oil sector picked up.

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