Muslim spending estimated at US$2.02 tril in 2019

KUALA LUMPUR – Spending on Islamic economic sectors, across food, pharmaceutical, cosmetics, fashion, travel and media/recreation, by 1.9 billion Muslims is estimated to grow 3.2% year-on-year to US$2.02 trillion (RM8.23 trillion) last year, according to the Global Islamic Economy Report 2020/21 by DinarStandard.

The report said the global Islamic economy continues to be underpinned by eight key drivers, including a large and expanding Muslim population, an increasing adherence to Islamic ethical values impacting consumption, and a growing number of national strategies dedicated to halal products and service development.

In addition, the report estimated that the value of Islamic finance assets increased by 13.9% to US$2.88 trillion in 2019 from US$2.52 trillion the year before.

“The pandemic is forecast to result in an 8% decrease in global Muslim spending in 2020 for the Islamic economy sectors covered in this report.

“All of these sectors, except travel, are expected to return to pre-pandemic spending levels by the end of 2021.”

Muslim spending is also anticipated to reach US$2.4 trillion by 2024 at a five-year cumulative annual growth rate of 3.1%.

Meanwhile, investments in Islamic economy-relevant sectors across Organisation of Islamic Cooperation (OIC) countries and select non-OIC markets fell by 13% to US$11.8 billion in 2019-20 from US$13.6 billion in 2018-19, with Indonesia, Malaysia and the United Arab Emirates seeing the most investments.

The number of relevant mergers and acquisitions, private equity and venture capital transactions fell to 156 in 2019-20 from 197 a year ago.

The top five nations in terms of the number of investment deals maintained their rankings, with Indonesia attracting a large share of investments, followed by Malaysia and the UAE.

In terms of sectors, halal food and Islamic finance comprised 52% and 42%, respectively, of the total deal value of US$11.8 billion.

The report also highlighted that Malaysia leads the overall Global Islamic Economy Indicator rankings for the eighth consecutive year.

“Malaysia has shown consistent growth across all the sectors, with export-to-OIC numbers increasing in food, pharmaceuticals, and media and recreation.

“Strong awareness and governance credentials have allowed Malaysia to rank higher than other countries with larger export volumes.” – Bernama, December 8, 2020