Indonesia managed to occupy the 3rd position in the Global Islamic Economy Indicator (GIEI) 2023. During the G20 Presidency, Indonesia established The Halal 20 (H20) Forum, which is an important milestone in the development and partnership of the global halal industry ecosystem. Together with Malaysia and Saudi Arabia, Indonesia leads the index among 81 countries with the strongest Islamic economic ecosystem.
Demand for halal products has increased significantly over the past decades. The majority of OIC countries depend on imports, most of which come from non-OIC member countries. Similar to the previous SGIE report, only two OIC countries, Turkey and Indonesia, are among the top 10 exporters to OIC countries, accounting for 53.7% of total exports.
In contrast to the global trend, investments related to the Islamic economy or involving OIC member countries as investors or targets showed a 128% growth in value from US$11.4 billion in 2021/22 to US$25.9 billion in 2022/23. The number of relevant mergers and acquisitions (M&A), private equity (PE) and venture capital (VC) deals increased from 199 deals in 2021/22 to 220 deals in 2022/23.
The Islamic banking sector accounts for 70% of global Islamic assets in 2021/2022 worth US$3.96 trillion, an increase of 17% from 2020/2021 worth US$3.37 trillion. By 2025/26 it is estimated to reach US$5.94 trillion, growing at a CAGR of 9%. In Islamic finance and banking, Indonesia ranks 7th globally. Significant progress in green and sustainable sukuk is evident around the world. Indonesia alone issued the largest global Green Sukuk worth US$1.5 billion for renewable energy projects. In addition, Indonesian Islamic fintech Hijra (formerly 'Alami') raised US$67.6 million and disbursed over US$300 million to SMEs.
In the halal food sector, Muslim consumer spending on food increased 9.6% in 2022 to US$1.4 trillion, up from US$1.28 trillion in 2021. Indonesia remains the largest market (ranked 2nd globally) in terms of consumption. Trade cooperation, such as the ASEAN bilateral trade agreement, opens up new opportunities for halal products in the trade sector. In addition, halal certification for meat in East Asian and South African markets presents promising prospects for halal trade expansion.
Meanwhile, sustainability and ethical practices in the production and use of halal materials are increasingly important in the modest fashion industry. By 2022, Muslim spending on clothing will be worth US$318 billion, an increase of 8.4% over the previous year. Indonesia is in 3rd place globally for the modest fashion industry. Indonesian hijab brand Elzatta entered the Indonesia Stock Exchange (IDX) listed as Elcorps with an IPO of Rp170 billion (US$114,218.58). This is the first Muslim fashion retailer to be listed in Indonesia.
