oil prices, the imf expects the gcc to expand 3. 4 % in 2015 2, and 3. 2 % in 2016. asia will remain the world ’ s fastest growing region, recording 5. 6 % growth in 2015, before easing slightly to 5. 5 % in the following year. trade and investment linkages will be strengthened with the conclusion of trade discussions between gcc and china, korea, gulf cooperation council ( gcc ) investment outlook 2014, mergermarkets. imf regional economic outlook update for middle east & central asia, may 2015. bis central bankers ’ speeches india, pakistan, malaysia and asean. singapore has already concluded a comprehensive fta with the gcc, which recognises islamic finance in the definition of financial services. cross - border islamic finance set to grow 6. the global islamic finance industry has been on an upward trajectory in the past decade, with total assets exceeding us $ 2 trillion in 2014, from us $ 700 billion in 2005. most of this demand stemmed from middle east and asia, and stronger trade and investment linkages between these regions will reinforce the growth momentum in islamic finance. looking ahead, the following key trends will also augur well for the outlook for cross border islamic finance : 7. first, increasing wealth accumulation in the middle east region. this will expand the pool of islamic funds seeking diversification into foreign investments. asia will be a key investment destination, as stronger growth prospects compared to developed economies present opportunities for higher investment returns, which would in turn, increase the demand for shariah - compliant assets in asian markets, including singapore, malaysia and indonesia. reflecting this trend, gcc banks have already been expanding their operations in singapore in recent years to support the deployment of islamic funds to corporates in the region, through islamic bank financing, and sukuk issuances. 8. second, more countries are boosting their islamic finance services and capabilities, in response to the growing demand for islamic finance solutions. singapore, for instance, has seen a steady increase in islamic finance activities, while hong kong has recently issued its second sukuk and japan is amending its financial regulations to facilitate islamic financing. 9. third, there is scope to extend islamic finance solutions to meet infrastructure financing needs in asia and in the middle east. in particular, the asian development bank ( adb ) has been working with the islamic development bank ( idb ) to provide islamic infrastructure financing solutions to their member countries in these two regions. this

includes developing and participating in innovative financing structures such as the islamic infrastructure fund and the international islamic liquidity management corporation. the idb is also exploring a potential link - up with the planned asian infrastructure investment bank ( aiib ). this could spur the use of sukuk to fund some of asia ’ s infrastructure needs, and tap a growing pool of islamic investors across the middle east and southeast asia. islamic finance in singapore 10. as an international financial centre and one that serves as a gateway for investments into asia, islamic finance is an important asset class that complements singapore ’ s strong conventional financing and capital market capabilities. islamic finance activities in singapore are broad - based, covering islamic banking, asset management and capital markets, which mirror our conventional strengths : • islamic banking assets in singapore have grown by 73 % since 2010, and are increasingly cross - border in nature. consistent with the pattern for conventional finance, islamic banking liabilities sourced from the region are subsequently deployed to southeast asia and the gcc ; • assets under management have also risen, by 22 % since 2010. singapore is home to sabana reit, which is the largest islamic reit globally by asset size. in 2013, sabana also launched a corporate sukuk programme in singapore to help finance its purchase of industrial properties ; and • islamic capital market activities have also taken off, with 31 sukuk issuances over the last five years. we have more sukuk issuances than other conventional jurisdictions, with total outstanding issuance reaching a high of s $ 3. 8 billion in 2014, compared to s $ 440 million in 2009. bis central bankers ’ speeches 11. to support the development of islamic finance in singapore, mas established a sukuk facility in 2009 to provide sgd islamic regulatory assets for banks undertaking islamic finance activities here. we remain the only conventional central bank to have done so. there have been 8 issuances to - date totalling s $ 600 million, supported by robust demand, with the latest issuance in november 2014 being our largest yet. our sukuk programme has facilitated the growth of banks ’ islamic finance assets in singapore, and also encouraged corporates to issue sukuk to meet demand from financial institutions and investors. 12. going forward, we will continue to strengthen our islamic finance regime and capabilities to enable us to support opportunities from deepening trade and investment linkages between asia and the middle east, as well as infrastructure projects within the asian region. in infrastructure