For the fifth year running, Malaysia leads the list of the top 15 Islamic economies, with the UAE appearing in second position followed by Bahrain, Saudi Arabia and Oman.

In the sector-wise rankings, Malaysia topped in Islamic finance while the UAE lead in sectors such as halal food, halal travel, modest fashion, halal media and recreation, and halal pharmaceuticals and cosmetics.

These are the findings of the Global Islamic Economy Report 2018/19, commissioned by the Dubai Islamic Economy Development Centre and produced by Thomson Reuters. Here are the key takeaways of the report, which was launched on Sunday in Dubai.

  • Muslim spend on halal food and beverage was valued at $1.3 trillion in 2017 and is forecast to reach $1.9 trillion by 2023.
  • Halal food is an attractive prospect for investors but is still an unrealised opportunity.
  • Numerous product categories are ripe for exploration in the halal food industry, notably organic products.
  • China is staking its claim in the international halal food trade opportunity.
  • Malaysia and the UAE seek to cement their central role in the halal food industry and are beginning to work together to set up a halal corridor.
  • Regulation of the industry continues to fall behind best practices, and there is a lot of room for the progress already made to continue.

ISLAMIC FINANCE

  • The Islamic finance industry was estimated to be worth $2.4 trillion in 2017 and is forecast to grow by 7.7 per cent CAGR to reach $3.8 trillion by 2023.
  • The top Islamic finance markets in assets include Iran ($578 billion) followed by Saudi Arabia ($509 billion), Malaysia ($491 billion), the UAE ($222 billion) and Qatar ($129 billion).
  • The GCC and Malaysia remain leading markets for Islamic finance, with notable improvements in the penetration of Islamic finance into commercial and personal banking activity.
  • While global Islamic finance remains a fragmented industry, multinational entities are slowly emerging, buoyed by positive growth, international alliances and M&A activity.
  • Islamic finance has been slow to adopt the rapid technological change that has shaped conventional banking, but recent developments, especially the rapid emergence of Islamic fintech, are promising.

HALAL TRAVEL

  • Muslim spend on travel was valued at $177 billion in 2017 and is forecast to grow to $274 billion by 2023.
  • The countries that have spent the most on Muslim-friendly travel are Saudi Arabia ($21 billion), the UAE ($16 billion), Qatar ($13 billion), Kuwait ($10 billion) and Indonesia ($10 billion).
  • Halal tourism is becoming increasingly digitised, with ventures into AI and virtual reality.
  • Oil-rich GCC countries that were largely indifferent to tourism are taking measures to increase tourism revenue to diversify their revenue sources and decrease their dependence on oil.

MODEST FASHION

  • Muslim spend on fashion was $270 billion in 2017 and is forecast to grow by 5 per cent CAGR to $361 billion by 2023.
  • The countries that have spent the most on Muslim apparel include Turkey ($28 billion), the UAE ($22 billion), Indonesia ($20 billion), Nigeria ($18 billion) and Saudi Arabia ($17 billion).
  • The modest-fashion industry is becoming increasing competitive, and leading global apparel brands and retailers have started to enter it.
  • Independent and digitally native modest brands are going through a positive investment phase with important, albeit humble, progress towards building a modest-native billion-dollar brands.

HALAL MEDIA AND RECREATION

  • Muslim spend on media and recreation was $209 billion in 2017 and is forecast to reach $288 billion by 2023.
  • The countries that have spent the most include Turkey ($28 billion), the United States ($21 billion), Russia ($12 billion), Saudi Arabia ($11 billion) and the United Kingdom ($10 billion).
  • The OIC is emerging as a production powerhouse for halal media, with Saudi Arabia’s entertainment reforms promising to open supply as well as demand for Islamic-themed content.
  • Millennials are much alike in their push for on-demand and app-based services, driving growth and innovation as well as supporting the case for investment in readily accessible Islamic-themed content.
  • The creation of Islamic-themed heroes as well as video game characters helps reinforce the identity of younger Muslims.

HALAL PHARMACEUTICALS

  • Muslim spend on pharmaceuticals was $87 billion in 2017 and is forecast to reach $131 billion by 2023.
  • The countries that have spent on halal pharmaceuticals include Turkey ($10.3 billion), Saudi Arabia ($7.5 billion), the United States ($6.8 billion), Indonesia ($5.2 billion) and Algeria ($4 billion).
  • Leaders in the pharmaceutical industry are increasingly attentive to the halal needs of Muslim consumers.
  • Demand for preventative medicine as well as a healthier and more holistic lifestyle, driven in part by Muslim Millennials in North America and Europe, is driving growth and expansion in halal medicine.

You can download your copy of the State of the Global Islamic Economy 2018/19 report on Salaam Gateway.

(Writing by Seban Scaria seban.scaria@refinitiv.com)

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