Pakistan secures position as core  Sukuk market globally, says Fitch

Pakistan is solidifying its position within the burgeoning global Islamic finance industry, cementing its status as a core market for sukuk issuance.

The country’s standing comes as the worldwide sukuk market reached historic highs, with global issuance surpassing $300 billion in 2025, the highest level on record and marking a 25% year-on-year increase across all currencies.

As of the end of 2025, Pakistan accounted for 2% of the total Global Sukuk Outstanding by Country of Risk. The country is counted among key markets, including the GCC, Malaysia, Indonesia, and Turkiye, where sukuk is anticipated to remain a vital funding tool through 2026.

“Geopolitical tensions and shifting shariah standards may pose risks, but fundamentals remain sound, supported by the market’s broadly solid credit profile: about 82.5% of rated sukuk are investment-grade, 90.5% of issuers are on Stable Outlooks, with no recorded sukuk defaults over the past four years.”, said Bashar Al Natoor, Fitch’s Global Head of Islamic Finance.

The projected global growth in issuance for 2026 is driven by factors such as upcoming maturities, refinancing needs, and the pursuit of funding diversification across sovereigns, corporates, and banks. The global outstanding sukuk volume also surpassed $1 trillion at the close of 2025.

This positive trajectory aligns with overall momentum in emerging markets (EMs), where the sukuk share of all dollar Debt Capital Market (DCM) issuance (excluding China) grew to approximately 16% in 2025, an increase from 12% in 2024.