Global sukuk issuance is projected to decline in 2026, with Fitch Ratings identifying the durability of the US-Iran ceasefire as the decisive variable for market recovery.
The rating agency’s outlook underscores how geopolitical fragmentation has displaced traditional macroeconomic drivers as the primary lens for assessing risk in Islamic finance markets.
Fitch’s assessment comes amid heightened sensitivity to Middle East stability, where any breakdown in the current truce could further suppress investor appetite for regional debt instruments.
The agency’s forecast suggests that without a clear path toward broader regional calm, issuers will face tighter funding conditions and reduced demand for new sukuk offerings.
This development aligns with a broader shift in global capital markets, where geopolitical risk premiums are increasingly embedded in pricing across emerging market debt.
Investors are now prioritizing political stability over yield differentials, a trend that has already impacted sovereign and corporate bond issuance in volatile regions.