Summary
Global long-term sovereign and supranational sukuk issuance volumes will decline this year from exceptionally high levels in 2024 as the two largest government issuers curb issuance activity, notwithstanding still high financing needs in most jurisdictions. » Sukuk issuance volumes to decline in 2025 and 2026. We expect government and supranational sukuk issuance to drop by nearly 20% to around $92 billion in 2025 and contract further to less than $90 billion in 2026. Saudi Arabia (Aa3 stable) will lead the decline because the government is unlikely to repeat its large liability management operations, which nearly doubled its issuance of sukuk in 2024. By contrast, we expect issuance to increase in Indonesia (Baa2 stable) and Turkiye (B1 positive) because of higher sukuk refinancing needs.