Saudi Arabia leads GCC bond market despite decline in debt issuance

Saudi Arabia maintained its position as the Gulf Cooperation Council region’s dominant issuer of bonds and sukuk during the first half of 2025, although total debt issuances fell by 20% compared to the previous year. According to a report from Kuwait Financial Centre, Saudi companies raised $47.93 billion across 71 issuances, down from $59.73 billion in the first half of 2024.

This decline in Saudi Arabia’s debt issuance is part of a broader trend across the GCC, where several nations have experienced reductions in the overall value of their debt issues. However, despite this drop, Saudi Arabia remained the undisputed leader in the region’s bond and sukuk markets.

The UAE emerged as the second-largest issuer, raising $24.03 billion from 69 issuances, marking a 22.2% increase compared to H1 2024. The strong performance in the UAE’s debt market reflects continued investor confidence in the country’s economic stability and the government's ability to navigate global challenges. The UAE’s position is further bolstered by its diversified economy and strategic initiatives aimed at attracting foreign investment.

Qatar, ranked third, secured $10 billion through 58 issuances. This total reflects a steady performance, with demand for Qatari bonds remaining strong despite global economic uncertainties. The country’s stable financial position and ongoing infrastructure development projects have helped maintain its appeal to investors.

Bahrain raised $5.62 billion in the first half of 2025, marking a modest but important contribution to the region’s overall debt issuance totals. Meanwhile, Kuwait recorded a notable 48% increase in issuance value, raising $3.39 billion. This surge in Kuwaiti issuances is largely attributed to the country's efforts to diversify its sources of funding and support economic development amid fluctuating oil prices.

Oman had the smallest issuance volume in the region, with just $1.08 billion raised from six issuances. While Oman’s market remains relatively small compared to its Gulf counterparts, its bond issuances are seen as a critical tool for funding development projects and maintaining fiscal stability.

Despite the overall decline in GCC debt issuance, several key trends have emerged in the region’s bond and sukuk markets. First, there is a clear preference among investors for sovereign and high-grade corporate debt, reflecting the continuing flight to safety amid global uncertainties. This trend is especially evident in Saudi Arabia, the UAE, and Qatar, where large institutional investors are increasingly focused on lower-risk instruments.

Another noticeable trend is the growing use of green and sustainability-linked bonds within the GCC. Countries such as Saudi Arabia and the UAE are increasingly issuing these types of bonds to support their ambitious sustainability goals and transition to greener economies. Green bonds have gained popularity in the region as both governments and companies look to finance projects that align with global environmental, social, and governance standards.

The rise of ESG-linked debt issuance is expected to continue, with more governments and corporations in the GCC focusing on sustainable investments. As part of its Vision 2030 initiative, Saudi Arabia has signalled its intention to increase green and sustainable finance, making such instruments a key part of its broader economic strategy.