International spending by Muslims has been hard-hit by the global coronavirus pandemic, according to a new report.
Muslims spent $2.02 trillion in 2019 on food, pharmaceuticals, cosmetics, modest fashion, travel, and media, reflecting 3.2 percent growth, said The State of the Global Islamic Economy Report (SGIE) 2020/21.
However, halal spending in 2020 is forecast to contract by eight percent due to the impact of the pandemic.
The annual SGIE report, produced by US advisory firm Dinar Standard, predicted that spending, excluding travel, is forecast to rebound by the end of 2021, and is slated to reach $2.3 trillion by 2024, at a cumulative annual growth rate of 3.1 percent.
Islamic finance assets are estimated to have reached $2.88 trillion in 2019 and are estimated to remain at the same level in 2020.
In the report’s Global Islamic Economy Indicator that covers 81 countries this year, Malaysia, Saudi Arabia, the UAE, Indonesia, and Jordan lead the rankings.
Saudi Arabia and Indonesia moved up in the rankings while Nigeria, Sri Lanka, and Singapore were new entrants to the top 15.
Investments in Islamic economy-relevant companies slowed in 2019/20, following a record year in 2018/19, dropping by 13 percent to $11.8 billion.
Over 54 percent of investments were within the halal products category, while Islamic finance and Islamic lifestyle attracted 41.8 percent and four percent of the investments respectively. Such figures reflect corporate-led mergers and acquisitions, venture capital investments in tech start-ups, and private equity investments.
Abdulla Mohammed Al Awar, CEO of Dubai Islamic Economy Development Centre (DIEDC), said: “In these uncertain times the development of the Islamic economy is a pillar of strength as we look to the future, with growth and investment continuing despite the impact of the pandemic.”
Rafi-uddin Shikoh, CEO and managing director of DinarStandard, commented: “The SGIE report this year highlights areas of opportunities amidst COVID-19 global supply chain disruptions, job losses, health services crises, and food security challenges with recommendations for governments, businesses, and investors to address both the opportunities and the challenges ahead.”