Why the rise in sukuk issuances

The majority rise in the supply of sukuk came from the GCC sovereigns. The coronavirus pandemic drove fiscal deficits sharply wider, leading to a sharp spike in issuance

Fiscal deficit of GCC sovereigns also ballooned, due to falling oil prices.

Saudi Arabia

Gross issuance is $44.5 billion in 2020, compared to $21.6 billion in 2019.

UAE

Gross issuance was $5.2 billion in 2020 compared to $1.9 billion in 2019. Sharjah issued $1.99 billion in sukuk last year, of which $1.45 billion was in dollars.

The forecast

This year there will be a slight decline in sukuk issuance, as higher oil prices and recovering economic activity support government revenue growth. Pandemic-related spending would likely fall.