The forecast suggests growing regional connectivity across Islamic finance markets, including the GCC and other major Islamic finance regions.
A larger, more connected market
Standard Chartered said Islamic finance assets grew 13% year on year in 2025. That pace would indicate strong expansion for the sector.
The expansion could widen the pool of Sharia-compliant assets available to Gulf investors.
Islamic finance growth is no longer driven only by retail demand or local regulation. These products are likely to benefit from sector growth.
Where the opportunity sits
These products already sit at the core of the market’s funding structure.
The GCC is a major center of Islamic finance activity. Standard Chartered’s forecast links the Gulf with ASEAN, South Asia and Africa, suggesting more capital can move along established trade and remittance routes. That opens room for banks, asset managers and debt issuers that can serve multiple markets with one product set.
Islamic finance growth also supports portfolio diversification. As the market expands, investors gain access to a broader range of sovereign, bank and corporate paper that meets Sharia principles. That can improve liquidity and deepen pricing across secondary markets.
For policymakers, the implication is just as clear. Greater scale can help markets build more efficient issuance channels, stronger benchmarks and wider investor participation. That is especially relevant in the GCC, where Islamic finance already plays a key role in financial intermediation.
Investors should watch sukuk supply, bank balance-sheet growth and the pace of cross-border product development across the GCC and its partner markets.
