Consumer spending in global Islamic Economy sectors recovered to US$2 trillion in 2021, set to hit US$ 2.8 trillion by 2025
Muslims worldwide spent US$2 trillion (AED 7.3 trillion) in 2021 across the food, pharmaceutical and lifestyle sectors that are impacted by Islamic faith-inspired ethical consumption needs, says the State of the Global Islamic Economy Report (SGIE) 2022 launched by the Department of Economy and Tourism (DET) in Dubai with the theme ‘Unlocking Opportunity.’
The ninth edition of the SGIE report, launched alongside the bell ringing ceremony at Nasdaq Dubai today, estimates global spending in Islamic Economy sectors to have achieved a healthy 8.9% growth in 2021, and forecasts it to reach US$2.8 trillion (AED 10.3 trillion) by 2025 at a cumulative annual growth rate (CAGR) of 7.5%.
Produced by DinarStandard, a US-based research and advisory firm, the SGIE report presents an annual update on the continued growth of the global Islamic economy, encompassing halal products, Islamic finance and related lifestyle sectors.
The report’s national benchmarking Global Islamic Economy Indicator’s methodology was updated for the first time in eight years. It ranks the UAE among the top three countries for the third consecutive year. The ranking, comprising 81 countries, continued to be led by Malaysia, Saudi Arabia, the UAE, and Indonesia, with Turkey making the biggest jump from 12th to 5th position. Within the sub-sector index, the UAE tops in the modest fashion sector ranking.
According to the report, Islamic finance assets worldwide are estimated to have reached US$3.6 trillion (AED 13.2 trillion) in 2022. Investments in Islamic economy-relevant companies increased by 118% in 2020/21 to US$25.7 billion (AED 94.3 billion) from US$11.8 billion (AED 43.3 billion) in 2019/20. About 66.4%of the total investments in Islamic economy-relevant companies were covered by Islamic finance transactions, followed by 23.6% in halal products (food, pharmaceuticals, cosmetics, fashion) and 10% in Islamic lifestyle (travel and media). The figures include corporate-led mergers and acquisitions, venture capital investments in tech start-ups, and private equity investments.
Import of halal-related products by the OIC member countries fell sharply by 6.5% from US$299 billion (AED 1.10 trillion) the previous year to US$279 billion (AED 1.02 trillion) in 2020. Imports by OIC member countries represent a significant majority of halal products traded globally, that include food and beverage, fashion (apparel and footwear), pharmaceuticals, and cosmetics.
His Excellency Ali Ibrahim, Deputy Director General of DET, said: “The UAE’s consistent rank amongst the top three in the Global Islamic Economy Indicator is a key outcome of the country promoting the global Islamic economy trade and investments. For the first time since 2018/19, the UAE has moved up to the first position in the number of Islamic economy-relevant investment deals in 2020/21. It is also among the top 10 OIC exporters of halal-related products, with exports worth US$7 billion (AED 25.7 billion) in 2020.”
His Excellency added that Islamic economy is making significant headway despite the post-pandemic global economic challenges is an accomplishment for Dubai too as the emirate had proactively identified Islamic economy as a strategic priority.
“His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, launched the Dubai: Capital of Islamic Economy Strategy in 2013. Since then, the Strategy has remained a key driver of economic diversification, trade and investments in Dubai, and across the UAE.” His Excellency said.
Rafi-uddin Shikoh, Managing Partner of DinarStandard, said: “This year’s SGIE report highlights some of the emerging global issues and its impact on the Islamic economy. It’s clear that the Islamic economies are recovering fast from the COVID-19 pandemic, with the various disruptions driving opportunities in digital acceleration and trade driven investments as ‘near shoring’ (sourcing products closer to home) and food/medicine security becomes national priorities. The report presents ‘signals of opportunities’ and recommendations for governments, investors and industry to navigate challenges and drive long-term prosperity.”
The SGIE report 2022 is distributed in partnership with SalaamGateway.com, the largest Islamic economy news and media platform. Global strategic partners of the report this year include halal certifier IFANCA, bank CIMB Islamic Bank, and the United Nations High Commissioner for Refugees (UNHCR).
The full State of the Global Islamic Economy Report 2022 is available for download at: www.salaamgateway.com/SGIE22
Dubai’s Department of Economy and Tourism (DET)
With the ultimate vision of making Dubai the world’s leading commercial centre, investment hub and tourism destination, Dubai’s Department of Economy and Tourism (DET) is mandated to support the Government in positioning the emirate as a major hub for global economy and tourism, and in boosting the city’s economic and tourism competitiveness indicators. Under this remit, DET is driving efforts to further enhance Dubai’s diversified, innovative service-based economy to attract top global talent, deliver a world-class business environment and accelerate productivity growth. Additionally, DET is supporting Dubai’s vision to become the world’s best city to live and work in by promoting its diverse destination proposition, unique lifestyle and outstanding quality of life, overall.
DET is the principal authority for the planning, supervision, development and marketing of Dubai’s business and tourism sectors. It is also responsible for the licensing and classification of all types of businesses, including hotels, tour operators and travel agents. The DET portfolio includes Dubai Corporation for Tourism and Commerce Marketing, Dubai Festivals and Retail Establishment, Dubai Industries and Exports, Dubai Investment Development Agency (Dubai FDI) and Dubai SME, as well as Dubai College of Tourism, Dubai Calendar and Dubai Business Events.