The Islamic economy is estimated to be worth $3.2 trillion by 2024, according to a halal guidebook published by the Dubai Airport Freezone Authority (DAFZA). Ranking first in the guidebook is the food and beverage (F&B) industry, with a total estimated value of around $1.4 trillion. The sector is expected to grow to near $2 trillion by 2021.
According to the State of the Global Islamic Economy Report 2019/20, the Islamic economy was valued at $2.2 trillion in 2018, which accounts for 12 percent of the global spend in the food, pharmaceutical and lifestyle sectors. The spending power of Muslims worldwide has witnessed a significant increase and is set to grow by 6.2 percent compound annual growth rate (CAGR).
The book, titled Dubai – A Global Gateway for Halal Industry: A Step-by-Step Guide examines the key trends that will have a lasting impact on the regional economy and also presents insights on the international and national Islamic economy.
Modest fashion, valued at $283 billion, is the second most popular sector. Islamic-themed media, halal pharmaceuticals and halal cosmetics have also been identified by the guidebook as key players in the economy.
Amna Lootah, Assistant Director General, DAFZA said: “In recent years, the UAE has intensified efforts aimed at expanding the economy with several initiatives and growth plans that have ensured a more diverse and vibrant Halal sector. Such activities have established Dubai and the wider UAE as one of the world’s most important business hubs and facilitated the progress of various industries including the emirate’s Islamic economy. So much so that investments in the Halal economy have recorded growth of 399 percent in 2018/19, with a value of $1.2 billion”
The Guidebook also outlines the extent to which the Halal sector has been affected by the intensified measures aimed at combating COVID-19. Within the Halal economy, the most challenged sectors have been travel, Islamic finance, and modest fashion while media and recreation provide strong opportunities. Food supply chain has also been severely disrupted but was quickly met with resilience from the Halal market economies that have consistently focused on bringing the supply chain closer to home by either investing in domestic production or finding closer regional supply chain partners.
“Dubai has an ideal location in the heart of the regional and global Islamic economy system, two hours distant by air from 455 million Islamic consumers, which is equivalent to US $587 billion of the value of the halal consumption market. The Emirate of Dubai is also the trade center for 57 countries of the Organization of Islamic Cooperation (OIC), which accounts for $296 billion of halal imports, according to 2018 results.” Amna Lootah said.
(Writing by Seban Scaria; editing by Daniel Luiz)
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© ZAWYA 2020