- Total sukuk issuances in the GCC reached a record $82.1bn in 2024, significantly higher than the $56.1bn issued in 2023.
- Qatar and Saudi Arabia led the surge in Islamic debt issuances, while the UAE had the highest bond issuances in the region at $49.7bn.
- GCC bond issuances totaled $103.4bn in 2024, a 71% increase, with both sovereign and corporate issuers showing growth.
- Rising demand for sukuks and sustainable financing, along with fiscal deficits like Saudi Arabia’s projected $27bn, is expected to drive further issuances.
The total sukuk issuances in the Gulf Cooperation Council (GCC) reached a record high of $82.1 billion in 2024, driven by significant growth in Islamic debt issuances from Qatar and Saudi Arabia.
According to Kamco Invest, a prominent regional economic think tank, this remarkable increase highlights the region’s expanding role in the global sukuk market.
Surge in GCC Sukuk and Bond Issuances
Sukuk issuances in the GCC soared from $56.1 billion in 2023 to $82.1 billion in 2024, reflecting a strong demand for Islamic financial instruments. Non-GCC global sukuk issuances, however, experienced a decline, dropping from $65.1 billion in 2023 to $50.4 billion in 2024.
The GCC remained a leading force in the broader Middle East and North Africa (MENA) region’s bond market, contributing more than 73% of the total issuances during 2024.
Total bond issuances by GCC countries climbed to a historic $103.4 billion in 2024, marking a 71% increase compared to the $60.5 billion recorded in 2023. This growth translated to an additional $42.9 billion in bond issuances.
UAE Leads GCC Bond Issuances
The UAE emerged as the largest contributor to bond issuances within the GCC in 2024, reaching $49.7 billion. This reflected substantial growth from $31.2 billion in 2023. Qatar followed closely with a significant increase of $13.4 billion in bond issuances during the year.
Saudi Arabia also played a key role in boosting the region’s bond market. The UAE led the region with total issuances of $49.7 billion, followed by Saudi Arabia at $30.8 billion and Qatar with $16.8 billion.
Increased Issuances by Governments and Corporates
The rise in bond and sukuk issuances involved both government and corporate entities. Sovereign bond issuances in the GCC surged from $20.2 billion in 2023 to $33.3 billion in 2024. Meanwhile, corporate issuances experienced even sharper growth, increasing from $40.3 billion in 2023 to $70.1 billion in 2024.
The significant rise in corporate issuances can be attributed to a favorable market environment and strong investor demand. Governments in the region also capitalized on this trend, taking advantage of the opportunity to raise capital for infrastructure projects and fiscal management.
Outlook for GCC Sukuk and Bond Issuances in 2025
The outlook for sukuk and bond issuances in the GCC for 2025 remains uncertain due to several global economic factors. Kamco Invest highlighted that the policies of the incoming US government could play a significant role, especially if inflationary trends continue. Changes in US monetary policy could influence global interest rates, impacting GCC debt markets.
Maturing debt in the GCC is expected to reach $89.8 billion in 2025, prompting both governments and corporations to focus on refinancing existing instruments. This refinancing is likely to account for a substantial portion of the total issuances in the region.
Saudi Arabia and Kuwait Drive Issuance Activity
Saudi Arabia continued its fundraising activities with a significant $12 billion bond issuance in 2024, while Kuwait’s KFH issued $1 billion in sukuk during the same period. These issuances reflect a broader trend of raising capital in response to rising treasury yields in global markets.
The trend of issuing large bonds and sukuk is expected to persist in 2025, especially as regional governments and corporations seek to secure favorable interest rates before potential policy shifts in global financial markets.
Influence of Diversification Goals and Fiscal Deficits
A key factor supporting bond and sukuk issuances in the GCC is the region’s ongoing economic diversification efforts. Countries like Saudi Arabia, the UAE, and Qatar continue to launch large-scale projects as part of their Vision 2030 and similar long-term development strategies. These projects require significant funding, further fueling the need for sukuk and bond issuances.
Fiscal deficits in the region also play a critical role in the increased debt activity. For example, Saudi Arabia forecasts a fiscal deficit of $27 billion in 2025, which is expected to drive further sovereign sukuk and bond issuances.
Positive Outlook for Sukuk Market Growth
The sukuk market outlook remains positive for 2025, with the GCC expected to continue dominating the global Islamic debt market. Strong demand for sukuk instruments and the growing interest in sustainable financing solutions are likely to drive further expansion.
Environmental, Social, and Governance (ESG)-compliant sukuk instruments are also gaining momentum, reflecting the region’s increasing focus on responsible investing and sustainability. This trend is expected to attract a broader range of investors seeking both ethical and profitable financial instruments.
Key Factors Influencing 2025 Issuances
Several factors are set to influence sukuk and bond issuances in the GCC throughout 2025:
- US Monetary Policy: Potential changes in US interest rates could influence regional borrowing costs.
- Refinancing Needs: Elevated debt maturities in 2025 will prompt significant refinancing efforts.
- Economic Diversification Projects: Large-scale infrastructure and development projects will continue to require funding.
- Fiscal Deficits: Sovereigns facing budget deficits, such as Saudi Arabia, may issue more debt to cover shortfalls.
- Sustainable Financing Demand: The rise of ESG-compliant instruments is expected to drive further sukuk issuances.
The GCC achieved record sukuk issuances in 2024, driven by strong contributions from Qatar, Saudi Arabia, and the UAE. With a total of $82.1 billion in sukuk and $103.4 billion in total bond issuances, the region solidified its position as a global leader in Islamic finance.
Looking ahead, 2025 is expected to witness continued activity, influenced by fiscal deficits, refinancing needs, and the ongoing pursuit of economic diversification. The positive outlook for sukuk issuances, particularly in ESG-compliant instruments, further reinforces the GCC’s pivotal role in shaping the global Islamic debt market.
