The GCC region saw a notable increase in Islamic debt issuances in 2024, driven by Qatar and Saudi Arabia, according to Kamco Invest. Total sukuk issuances reached a historic $82.1 billion, up from $56.1 billion the previous year, while non-GCC global sukuk fell to $50.4 billion from $65.1 billion.
The GCC was the primary contributor to the rise in bond issuances within the Middle East and North Africa, making up over 73% of the total. Bond issuances in the GCC hit a record $103.4 billion, marking a 71% increase. The UAE led with $49.7 billion, followed by significant growth in Qatar.
Government and corporate issuers in the GCC both saw increased activity. Sovereign bonds reached $33.3 billion, up from $20.2 billion, while corporate issuances rose to $70.1 billion from $40.3 billion.
Looking ahead, 2025 issuances may be influenced by US policy changes, potentially affecting inflation and the Federal Reserve’s strategies. With $89.8 billion in maturing debts, refinancing is expected to dominate the year’s issuances.
Recent activities, such as Saudi Arabia’s $12 billion bond issue, align with a broader regional strategy. A strong pipeline of projects linked to diversification goals is anticipated to fuel further issuances, especially in the latter half of 2025 as economic conditions become clearer.
Concerns about potential rate reversals in 2026 could prompt more issuances to secure lower rates. Fiscal deficits, like Saudi Arabia’s projected $27 billion, also play a role in supporting sovereign issuances.
The outlook for sukuk remains positive, with the GCC expected to maintain its market dominance. Rising demand for sukuks and sustainable financing is likely to boost global issuances of both sukuks and ESG-compliant instruments.