Skip to content Skip to Search
Skip navigation

GCC debt market on way to trillion-dollar milestone

Fitch expects Saudi Arabia to be one of the most active sukuk issuers this year Jackie Ellis/Alamy via Reuters
Fitch expects Saudi Arabia to be one of the most active sukuk issuers this year
  • Market reaches $940bn in Q1
  • Over a third of GCC debt is sukuk
  • Malaysia still largest sukuk market

The total debt capital market in the GCC is likely to cross $1 trillion this year, after reaching $940 billion in the first quarter of 2024.

New research from Fitch Ratings shows that more than a third of GCC debt issued last year was in the form of sukuk, also known as an Islamic bond. 

Sukuk are sharia-compliant bonds that were developed as an alternative to conventional bonds, which are not considered permissible by many Muslims as they pay interest and may finance businesses involved in activities not allowed under Islamic law.

This week Saudi Arabia’s Alrajhi Bank, the world’s largest Islamic bank, completed its $1 billion sukuk, while last week the Abu Dhabi sovereign wealth fund ADQ committed to a debt programme to help support the emirate’s economic growth.



Alrajhi raised $3.5 billion in subscriptions from local and international investors. ADQ’s inaugural $2.5 billion bond issuance on the London Stock Exchange last week attracted an order book of $11 billion. 

Marcos de Quadros, ADQ’s chief financial officer, said the fund would continue to use debt capital markets as an effective option to fund long-term investments.

Fitch said Saudi Arabia was expected to be one of the most active sukuk issuers this year, as the kingdom forecasts a budget deficit of 3 percent of GDP in 2024 and 3.4 percent of GDP in 2025

While surpluses are expected in the UAE, funding diversification by issuing sukuk is also predicted, Fitch said.

Bahrain will remain dependent on debt market access and GCC funding amid wide deficits, Fitch said, while Qatar and Oman are expected to continue to repay part of their debt stock, including sukuk, this year.

Oman’s publication of a sukuk and bond regulation adds clarity in the sultanate while the absence of a debt law constrains Kuwait’s funding options, Fitch said.

Sukuk issuance in core markets was nearly $57 billion in Q1, similar to a year earlier, while bond issuance fell by almost a quarter over the same period.

“Around 80 percent of GCC sukuk is now investment-grade, and the GCC debt capital market is well on its way to crossing $1 trillion outstanding,” Bashar Al Natoor, global head of Islamic finance at Fitch Ratings, said. 

Saudi Arabia, UAE and Malaysia are likely to stay among the most active sukuk issuers, Al Natoor said. 

Malaysia is still the largest sukuk market globally, with around 60 percent of its ringgit debt market in sukuk. Ringgit is the currency of Malaysia. The government is dependent on oil-related revenue. Its 2024 budget, which is slightly expansionary, will drive sukuk issuance, Fitch said.

GCC countries account for 35 percent of global outstanding sukuk, which Fitch estimates at about $867 billion at the end of Q1, up more than 10 percent year on year. 

Fitch data shows that in Q1, GCC banks issued more US dollar debt, 51 percent of which was sukuk, than in full-year 2023. 

“Corporates and projects will likely stay reliant on bank funding, but the government push to develop the debt capital market, and reduce bank reliance, could drive sukuk issuance,” Al Natoor said.

Fitch said it expects more global sukuk growth for the rest of 2024, albeit slower than in the first quarter, fuelled by funding needs, a need for diversification, refinancing needs and lower rates. 

Risks include new sharia requirements that could alter sukuk credit risk, geopolitical uncertainties and high oil prices, it said.

Latest articles

Tourism to contribute $64bn to UAE’s economy in 2024

The tourism sector’s contribution to the UAE’s economy is expected to reach AED236 billion ($64 billion) in 2024, accounting for 12 percent of the overall GDP, a senior government official has said.  The sector contributed AED220 billion to the GDP last year, accounting for almost 12 percent of the overall economy, Khaled Al Midfa, chairman of Sharjah […]

Helmet, Adult, Male

Saudi Aramco’s $10bn share sale slated for next month

Saudi Aramco’s anticipated share sale is expected to take place next month, according to a media report. The offering is projected to raise nearly $10 billion and will be listed on the local stock exchange, Reuters reported, citing unnamed informed sources.  The sources said details may still change, but the process continues. In September 2023, […]

Indoors, Restaurant, Cafeteria

Hong Kong’s airport lounge operator targets Saudi expansion

Hong Kong’s airport lounge operator, Plaza Premium Group (PPG), has earmarked $100 million to expand across the Middle East, focusing on Saudi Arabia. The regional expansion is part of its three-year $300 million global expansion plan. The funds will be allocated to opening lounges, establishing an airport concierge service with white-glove service, opening innovative dining outlets and exploring […]

Russians Turkey Istanbul Bridge

Russians rush from Turkey as costs and restrictions bite

Rising costs, increased difficulties in obtaining residency permits and tighter enforcement of restrictions on the number of foreign nationals who can live in popular regions are prompting an exodus of Russian citizens from Turkey.  The number of Russian nationals holding Turkish residence permits has plunged to just over 96,000 as of May 16, down from […]