The Impact of Islamic Sukuk on Achieving Economic Growth - Saudi Arabia Case Study

Abstract

This study aims to analyze the impact of Islamic Sukuk in supporting and stimulating economic growth in the Kingdom of Saudi Arabia, focusing on its role as an innovative financing tool in line with the principles of Islamic Sharia. The study highlights the importance of Sukuk in financing major development projects and infrastructure, and its pivotal role in achieving the goals of the Kingdom's Vision 2030.

The study relied on analyzing economic data for the specified period, and concluded that Sukuk issuances have a positive and significant impact on the gross domestic product. It was found that increasing the issuance of Sukuk by one unit contributes to increasing the GDP by (2.6), which reflects its significant impact in enhancing economic growth.

Despite the remarkable success of Islamic Sukuk in the Kingdom, the study faced some challenges such as the absence of a unified legal framework for issuing Sukuk and the lack of awareness of its importance as a financing tool. The study recommended the need to strengthen the financial and legal infrastructure, increase awareness of Islamic Sukuk among local and international investors, and encourage the private sector to use it as a means of financing development projects.

 The results confirm the importance of Islamic bonds as an effective tool for achieving economic growth in the Kingdom of Saudi Arabia and supporting the desired economic transformation within Vision 2030.