Prime Highlights:
- Saudi Arabia’s debt market is expected to grow to $600 billion by the end of 2026, reinforcing its position as a leading emerging market issuer.
- Sukuk, or Shariah-compliant bonds, continue to dominate, making up 62% of total outstanding debt and attracting strong local and international investor interest.
Key Facts:
- In 2025, US-dollar debt issuance rose nearly 49% to around $100 billion, with sukuk growing faster than conventional bonds.
- Saudi Arabia became the largest dollar-debt issuer among emerging markets outside China, holding an 18% share of total issuance.
Background:
Saudi Arabia’s debt market is set to reach $600 billion by the end of 2026, Fitch Ratings says. The projection reinforces the Kingdom’s position as the largest US-dollar debt and sukuk issuer among emerging markets.
Fitch noted that Saudi Arabia’s outstanding debt crossed $520 billion in 2025, marking a 21 percent year-on-year increase.
Bashar Al-Natoor of Fitch Ratings said the expansion is supported by government borrowing needs, regulatory changes, and expectations of lower oil prices and interest rates. He added that nearly all Fitch-rated Saudi sukuk remain investment grade, with issuers maintaining stable outlooks and no recorded defaults.
Investor participation has increased after recent market reforms, with foreign investors now holding over 10 percent of the government’s domestic debt issued in local primary markets. This reflects growing international confidence in Saudi Arabia’s debt market.
In 2025, Saudi Arabia’s US-dollar debt issuance jumped nearly 49 percent to about $100 billion. Sukuk grew faster than traditional bonds, making the Kingdom the largest dollar-debt issuer among emerging markets outside China, with an 18 percent share. It also led the region in environmental, social and governance (ESG)-linked dollar debt, capturing over 26 percent of market share.
Fitch said banks are issuing more subordinated sukuk as access to riyal and dollar markets improves. This has helped banks handle tight liquidity without adding currency risk.
Saudi Arabia’s borrowing plan, approved by the National Debt Management Center, aims to raise up to 50 percent of government funding from private markets, with the rest coming from international and domestic debt markets.
Although risks remain from oil prices, interest rates, Shariah rules and geopolitical issues, Fitch expects Saudi Arabia’s debt market to keep growing through 2026.
