Islamabad — Pakistan has set a record in Islamic finance, issuing more than PKR 2 trillion worth of Sukuk during 2025. This marks the largest annual volume since Shariah‑compliant instruments were first introduced in the country in 2008, underscoring a decisive shift in debt strategy toward Islamic financing.
What Sukuk Are
Sukuk are Shariah‑compliant financial instruments that avoid interest by linking returns to tangible assets or projects. They represent partial ownership in an asset, with investors earning income through rentals or profit‑sharing. Unlike conventional bonds, which are debt obligations, Islamic bonds are structured to comply with Islamic law while serving as a tool for sovereign and corporate financing.
Pakistan’s Landmark Achievement
According to official data, Pakistan floated 61 Sukuk in 2025 across one‑year, three‑year, five‑year, and ten‑year tenors. The issuance included both fixed and variable rental rate structures, attracting a diverse investor base. These shariahocompliant bonds now account for 14.5 percent of government securities, with authorities targeting 20 percent by FY2027‑28.
Why It Matters
The record issuance expands opportunities for Shariah‑compliant investors, diversifies Pakistan’s borrowing sources, and strengthens its standing in the global Islamic finance sector. Analysts note that the scale of issuance signals growing confidence in Pakistan’s Islamic debt instruments and could attract international institutions, opening doors for cross‑border Sukuk collaborations.
Legacy and Future Outlook
Pakistan’s Sukuk journey began modestly in 2008. With this record issuance in 2025, the country has firmly established the financial instruments as a cornerstone of its debt management strategy. The government aims to further expand Sukuk’s share in public debt, embedding Islamic finance as a central pillar of Pakistan’s economic future.
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Sources: Business Recorder, The Express Tribune
