Page 72 - KLIFF2022eBook

KLIFF 2022 PROGRAMME BOOK

A Growth Rate Of About 10% in 2022-2023

The Islamic finance industry continued to expand in 2021 with assets up 10.2%, versus 11.4% in 2020, supported by banking
asset growth (see chart 1).

Thanks to higher commodity prices and the relative resilience of many core Islamic finance countries to the Russia-Ukraine
conflict, we believe the industry will continue to expand about 10% annually, supported by:

Economic acceleration: We expect economic growth to accelerate in most core markets, particularly the GCC and Malaysia,
thanks to higher oil prices. Indonesia is also expected to see stronger economic growth, while we forecast a significant
slowdown in Turkey following double-digit expansion in 2021 (see chart 2). Global headwinds are also clouding the outlook
including:

- The Russia-Ukraine conflict and heightened tensions with the North Atlantic Treaty Organization (NATO), which are more
protracted than expected;
- Continued stubbornly high inflation, fueled by food and commodity prices;
- The Chinese authorities’ lockdowns in major cities and regions to stem COVID-19; and
- The U.S. Federal Reserve and other major central banks ramping up their fight to rein in inflation.

We recently announced downward revisions to our global macroeconomic base-case forecasts for the world’s three major
economic regions. We now forecast growth of 4.2% in China, 2.4% in the U.S., and 2.7% in the eurozone in 2022. This evolving
global macroeconomic picture could affect core Islamic finance countries.

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