Saudi Arabia’s Ascension in Global Debt Issuance signals a pivotal shift in economic strategies, as the kingdom’s market size is notably smaller compared to China’s, being approximately just 6.25% of the Asian giant’s economy. The kingdom is ambitiously redefining its business landscape with the aim of becoming a formidable global commercial hub by the year 2030.
Recent figures have highlighted a surge of investor confidence, as the country is actively procuring funds to support initiatives that promise to diversify its economy beyond its traditional oil foundations. Additionally, Saudi Arabia is striving to establish itself as a crucial connector bridging Asia and Europe.
Other emerging nations are also experiencing a flourishing year in the bond market. However, the focus remains on Saudi Arabia where bond sales from its entities have seen an 8 percent increase, amassing over $33 billion. The government’s contribution to this total is significant, having executed a substantial $5 billion sukuk deal denominated in dollars the previous month.
With an eye on alternative financing, the kingdom is poised to cover a projected fiscal shortfall of roughly $21 billion this year. Total funding activities are anticipated to reach about $37 billion by year-end.
It is crucial to recognize that the kingdom has grown increasingly dependent on the bond markets, amidst subdued foreign direct investment flows and a decline in oil revenues due to enforced supply cuts.