The Role of Sharia Financial Instruments in Supporting Indonesia’s Economic Growth: An Analysis of Sharia Banking, Sukuk, and Sharia Insurance for the Period 2018–2025

Abstract

Purpose: The purpose of this study is to determine the extent to which Islamic banking, sukuk, and Islamic insurance influence Indonesia’s economic growth from 2018 to 2025.

Design/methodology/approach: This study employs a quantitative method, and data were collected from the websites of the Financial Services Authority and the Central Statistics Agency, which were processed through the Ministry of Trade’s “Satu Data” platform. The research sample used is a saturated sample, consisting of total BUS and UUS financing data, outstanding sukuk values, total gross contribution data, and quarterly Gross Domestic Product (GDP) data from 2018 to 2025. Data analysis in this study was conducted using Eviews 12.

Findings: The results of the study indicate that Islamic banking, sukuk, and Islamic insurance each have a positive and significant impact on Indonesia’s economic growth. Collectively, these three variables also have a significant impact, accounting for a large portion of the variation in economic growth.

Practical implications: The findings of this study suggest that strengthening the Islamic finance sector through increased productive financing, the development of the sukuk market, and the optimization of the Islamic insurance industry can serve as strategies to support sustainable economic growth.

Originality/value: By examining the concurrent impacts and current trends in Islamic banking, sukuk, and Islamic insurance, this study aims to address gaps in existing research and contribute to filling those gaps, thereby fostering a more comprehensive understanding of the role of Islamic finance in Indonesia’s economic growth.

Paper type: empirical