Total GCC debt capital market (DCM) volumes rose 12.7 per cent year on year to US$1.1 trillion by the end of 3Q25, according to a new report from Fitch Ratings.
The agency said sukuk issuance increased by nearly 22 per cent over the same period, outpacing conventional bond growth of 7.2 per cent. The findings underscore the region’s growing preference for Islamic finance and its continued progress in building deeper, more liquid capital markets.
“We expect the GCC debt capital market to remain resilient into 2026, supported by robust issuance, favourable funding conditions, and a high-quality issuer base – over 81 per cent of rated dollar sukuk are investment grade, signalling strong underlying credit,” said Bashar Al Natoor, Fitch’s Global Head of Islamic Finance.
Fitch noted that the GCC accounted for around 32 per cent of all emerging market US dollar debt issued in the first nine months of 2025, excluding China. This was attributed to government efforts to diversify funding sources, finance major projects and manage refinancing needs for upcoming maturities.
Saudi Arabia and the United Arab Emirates remain the region’s largest and most developed markets, holding 46 per cent and 30 per cent of total outstanding debt respectively. Fitch added that while debt activity was seen across all six GCC states, market maturity and depth vary between them.
The ratings agency said it covers over 70 per cent of the GCC dollar sukuk market, with 65 per cent rated in the ‘A’ category and nearly 85 per cent of issuers maintaining stable outlooks. Sovereign debt-to-GDP ratios across the GCC remain below global averages, although Bahrain is forecast to reach 129 per cent by the end of 2025.
Environmental, social and governance (ESG) instruments also continued to expand rapidly, Fitch said. The value of ESG debt outstanding in the GCC reached US$62.8 billion by the end of the third quarter, with sukuk accounting for almost half after a 54 per cent year-on-year increase.
Strong credit profiles, favourable market conditions and a growing investor base are set to keep the GCC’s debt market resilient into 2026, said Fitch.
Follow us on
