US$2.02 trillion consumer spending in Islamic Economy sectors forecasted for an 8% drop in 2020, travel worst hit while food fares the best: State of the Global Islamic Economy Report 2020/21
Dubai, November 16th, 2020 – Dubai Islamic Economy Development Centre (DIEDC) has announced the results of the State of the Global Islamic Economy Report (SGIE) 2020/21 with a theme of ‘Thriving in Uncertainty’. Launched in 2013, the eighth edition of the report presents an annual update on the Islamic Economy – encompassing halal products, Islamic finance, and lifestyle sectors and services – pre and post-COVID-19.
This year’s SGIE Report, produced by DinarStandard, a US-based research and advisory firm, estimates that Muslims spent US$2.02 trillion in 2019 on food, pharmaceuticals, cosmetics, modest fashion, travel, and media. While this spending reflects 3.2 percent year-on-year growth, Muslim spending in 2020 is forecast to contract by 8 percent due to the impact of the pandemic. However, spending, excluding travel, is forecast to rebound by the end 2021, and is slated to reach US$2.3 trillion by 2024, at a cumulative annual growth rate (CAGR) of 3.1 percent. Islamic finance assets are estimated to have reached US$2.88 trillion in 2019 and are estimated to remain at the same level in 2020.
In the report’s Global Islamic Economy Indicator that covers 81 countries this year — Malaysia, Saudi Arabia, the UAE, Indonesia, and Jordan lead the rankings. Saudi Arabia and Indonesia moved up in the rankings while Nigeria, Sri Lanka, and Singapore were new entrants to the top 15.
Investments in Islamic economy-relevant companies slowed in 2019/20, following a record year in 2018/19, dropping by 13 percent to US$11.8 billion. Over 54 percent of investments were within the halal products category, while Islamic finance and Islamic lifestyle attracted 41.8 percent and 4 percent of the investments respectively. Such figures reflect corporate-led mergers and acquisitions, venture capital investments in tech start-ups, and private equity investments.
Abdulla Mohammed Al Awar, CEO of Dubai Islamic Economy Development Centre (DIEDC), said: “In these uncertain times the development of the Islamic Economy is a pillar of strength as we look to the future, with growth and investment continuing despite the impact of the pandemic. The ethics and principles rooted in the Islamic Economy and highlighted in the SGIE report, provide a roadmap for governments and companies to develop the sector as they navigate the challenges ahead.”
Rafi-uddin Shikoh, CEO and Managing Director of DinarStandard, said: “The SGIE report this year highlights areas of opportunities amidst COVID-19 global supply chain disruptions, job losses, health services crises, and food security challenges with recommendations for governments, businesses, and investors to address both the opportunities and the challenges ahead. Among the 33 ‘signals of opportunities’ covering each of the seven sectors identified, is the tokenization of sukuks within Islamic fintech and accelerated digital transformations across all sectors prompted by the COVID-19 pandemic. Within Halal products, supply chain shifts, food security investments, and nutraceutical demand are also some of the signals identified.”
The SGIE report also continues to highlight Islamic economies’ social impact developments in addressing the United Nations’ Sustainable Development Goals (SDGs) including initiatives addressing the exacerbated poverty and food security crisis from the COVID-19 pandemic.
The SGIE report 2020/21 has been produced 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 and bank CIMB Islamic.
The full State of the Global Islamic Economy Report 2020/21 is available for download at: www.salaamgateway.com/SGIE20-21.Article Courtesy Salama Evans – HalalFocus