RIYADH: Gulf Cooperation Council sukuk outstanding climbed 12.7 percent to $1.1 trillion by the end of the third quarter of 2025, as Saudi Arabia and the UAE drove another strong year of Islamic debt issuance.
In its latest report, Fitch Ratings said debt capital market activity in the GCC is expected to remain strong into 2026, supported by a healthy pipeline of anticipated issuances.
According to the US-based credit rating agency, sukuk issuances increased 22 percent year on year in the first nine months of this year, accounting for 40 percent of total GCC DCM outstanding.
Sukuk also outpaced bond growth, which expanded 7.2 percent year on year. Also known as Islamic bonds, these Shariah-compliant debt products allow investors to gain partial ownership of an issuer’s assets until maturity.
The steady momentum in global sukuk markets underscores the expansion of debt markets in countries such as Saudi Arabia, where domestic and international investors seek diversification and stable returns.
“We expect the GCC debt capital market to remain resilient into 2026, supported by robust issuance, favorable funding conditions, and a high-quality issuer base – over 81 percent of rated dollar sukuk are investment grade, signalling strong underlying credit,” said Bashar Al-Natoor, global head of Islamic Finance at Fitch Ratings.
He added: “However, the GCC DCM remains fragmented across its six member countries in terms of maturity, depth and credit profile, with Saudi Arabia and the UAE the most developed, although all markets saw activity this year.”
According to the report, countries in the GCC accounted for 32 percent of all emerging market US dollar debt issued in the first nine months of this year and will continue to be among the leading EM dollar debt issuers in 2026.
Fitch said this growth will be driven by government initiatives to develop the DCM, diversification goals, funding deficits and projects, and sizeable upcoming maturities.
The largest debt capital market in the GCC is Saudi Arabia, which held 46 percent of outstanding DCM in the region, followed by the UAE at 30 percent.
The report added that environmental, social and governance DCM outstanding in the GCC reached $62.8 billion by the end of September, with sukuk’s share rising to nearly half on a 54.1 percent year-on-year increase.
