Saudi Arabia remains GCC's biggest borrower in H1 2025 despite 20% YoY drop in debt issuance

In the first half of 2025, Saudi Arabia retained its position as the top issuer in the Gulf Cooperation Council’s debt markets, raising $47.93 billion through bonds and sukuk. While this figure reflects a nearly 20 percent drop from the same period last year, the Kingdom still commanded over half of the region’s total issuances. A new report by Kuwait Financial Centre “Markaz” provides a detailed view of the GCC's evolving fixed income landscape, highlighting shifting issuance preferences, currency trends, and sector-wise activity.

Saudi Arabia at the Forefront – But Issuances Decline
According to a comprehensive report by Kuwait Financial Centre (Markaz), Saudi Arabia raised $47.93 billion from 71 bond and sukuk issuances during the first six months of 2025. This accounted for 52.1 percent of total debt activity across the GCC, confirming the Kingdom’s dominant role in the region’s primary debt market. However, this volume represents a 19.8 percent decrease compared to $59.73 billion raised during the same period in 2024.

Despite the drop, Saudi Arabia maintained a significant lead over its regional peers. Here’s how other GCC countries performed in the first half of 2025, based on total issuance volume and market share:

Saudi Arabia:

• Raised $47.93 billion through 71 issuances
• Accounted for 52.1% of total GCC debt issuance
• Down from $59.73 billion in H1 2024 (-19.8% year-on-year)

United Arab Emirates (UAE):

• Secured $24.03 billion from 69 issuances
• Represented 26.1% of the regional total
• Marked a 22.2% increase from the previous year

Qatar:

• Raised $10 billion across 58 issuances
• Captured 10.9% of total GCC issuance

Bahrain:

• Collected $5.62 billion from 7 issuances
• Made up 6.1% of the regional total
• Reflected a 49.7% increase year-on-year

Kuwait:

• Issued $3.39 billion through 4 transactions
• Accounted for 3.7% of the GCC total
• Saw a 48% year-on-year increase

Oman:

• Recorded $1.08 billion from 6 issuances
• Held the lowest market share at 1.2%

Across the region, GCC-wide debt issuance totaled $92.04 billion from 215 issuances in H1 2025, down 5.5 percent year-on-year from H1 2024. This regional total reflects the combined efforts of sovereigns, corporates, and financial institutions to tap into capital markets amid changing macroeconomic conditions.

In its December review, Fitch Ratings noted that total outstanding debt in the GCC surpassed $1 trillion, a milestone reflecting the maturing debt ecosystem in the Gulf.

Changing issuance preferences – rise of conventional debt
Markaz highlighted a shift in issuance trends within the GCC in early 2025. Conventional bonds made up 56.1 percent of total debt instruments, marking a reversal from H1 2024, where sukuk (Sharia-compliant bonds) held a majority share.

In terms of value:

• Conventional debt issuance rose 7.8 percent year-on-year to $51.61 billion.
  
• Sukuk issuances, in contrast, declined 18.2 percent, amounting to $40.43 billion.
  

For context, sukuk are Islamic financial certificates that provide partial ownership in an asset pool and are structured to comply with Islamic law, serving as an alternative to interest-bearing bonds.

The increasing appeal of conventional bonds in 2025 appears to reflect evolving investor appetite and greater flexibility in issuance terms. The GCC debt market is continuing to diversify in both format and funding sources.

Currency landscape – USD dominates, riyal follows
The US dollar remained the preferred currency across the GCC primary market. In the first half of 2025:

• USD-denominated issuances reached $73.1 billion across 146 deals, representing 79.4 percent of total issuance volume.
  
• The Saudi riyal was the second most-used currency, with $7 billion raised from eight issuances.
  
• Currencies grouped under "other" amounted to $2 billion, of which the Hong Kong dollar contributed $682 million from 20 issuances, accounting for 0.74 percent of the region’s total.
  
  

A separate Fitch Ratings report from April revealed that GCC countries were responsible for over 35 percent of all emerging-market US dollar debt issued in Q1 2025, up from approximately 25 percent in 2024, excluding China.

These figures underscore the continued international appeal of GCC sovereign and corporate issuances, particularly among dollar-based investors.

Sector & issuer breakdown – corporates lead activity

Corporate issuances surged in H1 2025, rising 67.7 percent year-on-year to reach $60.20 billion. This represented 65.4 percent of the region’s total debt activity. By contrast:

• Government-related entities issued $11.2 billion across 11 deals, posting a modest 1.8 percent increase from the prior year.
  
• Sovereign issuances fell sharply by 48.2 percent, totaling $31.85 billion across the region.
  

In terms of sectoral distribution:

• The financial sector led with $40.1 billion raised through 167 issuances, making up 43.6 percent of all activity.
  
• Government entities followed with $31.9 billion from 25 issuances.
  
• The energy sector recorded $8.6 billion from nine deals, accounting for 9.4 percent of the total.
  
• Remaining sectors together comprised 12.5 percent of total issuance.
  
  

The issuance size across the GCC ranged widely, from as little as $2 million to $5 billion, reflecting varying capital needs and issuer profiles across public and private institutions.