Malaysia's Islamic finance assets surpass US$800b, says Fitch
KUALA LUMPUR: Malaysia’s Islamic finance industry is estimated to have exceeded US$800 billion by the end of the third quarter of 2026 (Q3 2026), supported by a mature domestic ecosystem and government policy measures, said Fitch Ratings.
KUALA LUMPUR: Malaysia's Islamic finance industry has surpassed US$800 billion by the end of Q3 2026, according to Fitch Ratings. Sukuk made up 47% of the industry's assets, followed by Islamic banking at 42%, Islamic funds at 8%, and takaful at 3%. The industry's strength lies in its developed domestic market and one of the most advanced Islamic finance systems in the world.
Malaysia maintains its top position as the world's largest sukuk market, accounting for 33% of global sukuk outstanding. The government recently re-entered the US dollar sukuk market with a US$1.5 billion issuance. Fitch expects government debt, including sukuk, to gradually decline, supported by nominal GDP growth and fiscal consolidation.
Debt is projected to drop to around 74% of GDP in 2027. Fitch predicts the industry will continue to grow, supported by a mature market, ecosystem, and government policy. However, external factors such as market volatility and fluctuations in currencies, interest rates, and commodity prices could impact the sector's growth.
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