Islamic finance to play larger role in sustaining economic growth

Thomson Reuters and the Islamic Corporation for the Development of the Private Sector (ICD) — the private sector development arm of the Islamic Development Bank (IDB) — yesterday released the key findings of the fifth edition of the Islamic Finance Development Report and Indicator (IFDI) at the World Islamic Banking conference (WIBC) 2017 held in Bahrain.

The report studied key trends across five indicators used to measure the development of the $2.2 trillion Islamic finance industry which are: Quantitative Development, Knowledge, Governance, Corporate Social Responsibility and Awareness. It also compiled extensive statistics on the industry from 131 countries and highlighted the best-performing countries within each key area of performance.

The IFDI global average value, which acts as a barometer of the overall industry’s development, recovered to 9.9 in 2017 from 8.8 in 2016. This reflected improved performances in each of the five indicators.

Malaysia, Bahrain and the UAE lead the IFDI country rankings for the fifth consecutive year, while the GCC remains the leading regional hub for the industry. Countries in the Commonwealth of Independent States (CIS), Europe, East and West Africa saw notable improvements in their IFDI values, demonstrating the continued growth of Islamic finance in non-core markets.

The report also highlights how Islamic finance can help countries adapt to difficult economic conditions.

Khaled al Aboodi, CEO of ICD, said: “Incorporating Islamic finance in different strategies can be seen in the many steps taken by governments across different IFDI indicators.”