According to S&P Global Ratings’ new report, sukuk issuance is expected to increase in 2026 on the back of lower oil prices and higher financing needs in some GCC (Gulf Cooperation Council) countries.
The demand will also be driven by supportive economic environments in core Islamic finance countries and by the United States Federal Reserve’s likely continuation of monetary easing policies.
“Overall, we expect issuance to reach USD 270-USD 280 billion, including foreign currency issuance of USD 100-USD 110 billion,” said the rating agency’s Islamic Finance Head Mohamed Damak.
In 2025, the sukuk market remained concentrated among a few issuers, with GCC countries Saudi Arabia and the UAE accounting for 45% of issuance volume, followed by Malaysia.
“While we do not expect this structure to change significantly, we have seen interest from new issuers, with some successfully entering the market, such as Egypt,” the senior official added.
S&P expects new issuers to tap the Islamic finance market in 2026 to diversify their investor base and secure more competitive pricing than conventional bonds.
Also, global sukuk issuance increased to USD 264.8 billion during the year, up from USD 234.9 billion in 2024, underpinned by strong performance from Malaysia, Saudi Arabia, Turkey, the UAE and Bahrain.
In fact, Saudi Arabia was the second-largest contributor to last year’s growth tally, with USD 72.5 billion in sukuk issuance, including USD 38 billion in foreign currency, rising 35% from 2024. Additionally, the Kingdom’s banking sector issued more than USD 15 billion in sukuk, including nearly USD 12 billion in foreign currency-denominated sukuk, to continue funding “Vision 2030” initiatives.
The UAE, on the other hand, contributed USD 22.1 billion in issuance, of which USD 19 billion was in foreign currency.
“Real estate developers, particularly in Dubai, were among the UAE’s top issuers as they sought funds to finance land acquisition and launch new construction projects amid favourable demand trends. The report also highlighted downside risks to the outlook, including the possibility of a major spike in geopolitical risk, which could reduce investors’ appetite for sukuk and bond issuances from the GCC,” Damak concluded.