Muscat – Aggregate bond and sukuk issuances in the GCC region stood at $100.3bn during the first half of 2025, compared with $128.8bn during the same period last year, marking a year-on-year decline of $28.5bn or 22.1%.

The drop was primarily driven by a more than 50% decline in government issuances during H1 2025, although a rise in corporate issuances helped partially offset the overall decline.

Government bond and sukuk issuances across GCC countries fell to $36.6bn in H1 2025, down from $76.9bn in H1 2024. Meanwhile, corporate issuances rose to $63.7bn, up from $51.9bn in the first half of last year, according to a research report published by Kuwait-based Kamco Investment.

By type, sukuk issuances saw a sharp decline in H1 2025, while bond issuances remained largely flat year-on-year. Total GCC bond issuances amounted to $60.9bn this year versus $60.2bn in H1 2024, whereas sukuk issuances dropped by nearly a third to $39.4bn from $68.6bn in the same period last year.

Broad-based decline

At the country level, a broad-based year-on-year decline in issuances was observed across the GCC in H1 2025, with the exception of marginal growth in the UAE and Bahrain. Issuances from the UAE rose 3.8% to $32.9bn, compared with $31.7bn in H1 2024.

In contrast, Saudi Arabia, Oman, and Qatar recorded double-digit declines. Total issuances from Saudi Arabia stood at $50.2bn – still accounting for half of the GCC total – but this figure was down by nearly a third from $72.4bn in H1 2024. Issuances from Qatar and Oman nearly halved, falling to $8.7bn and $1.1bn, respectively.

‘We believe that the GCC will witness back-end loaded issuances this year, in contrast to heavier issuances at the start of last year. Fixed income issuers are likely to focus on locking in lower rates as expectations for rate cuts gain momentum towards the end of the year, especially as uncertainty regarding tariffs becomes clearer,’ Kamco Investment noted.

Kamco Investment expects GCC sukuk issuances to regain momentum in the second half of 2025, supported by demand from niche investors and diversification of funding sources.

Elevated debt maturities

According to Kamco Investment, GCC governments are expected to face elevated levels of debt maturities over the next five years, particularly for bonds issued in the post-pandemic period.

Data from Bloomberg shows that GCC sovereign debt maturities stand at $226.1bn between 2025 and 2029, while corporate debt maturities are slightly lower at $223bn.

‘Both bond and sukuk maturities are projected to remain high from 2025 to 2029 before gradually tapering off. The elevated maturities reflect a concentration of short-term (less than five-year) issuances by both governments and corporates,’ Kamco Investment said.

A majority of these maturities are denominated in US dollars (59.3%), followed by local currency issuances in Saudi riyal and Qatari riyal, accounting for 16.9% and 7.0% respectively.

Given the strong credit rating profile of GCC governments, a substantial portion of these maturities are categorised as high investment grade or A-rated instruments, totalling $158.5bn. Investment-grade maturities overall amounted to $171.7bn.

By instrument type, conventional bonds dominate the GCC debt market, with $278bn in maturities expected over the next five years, compared with $171bn in sukuk maturities. Within the conventional bond category, corporate maturities amounted to $144.3bn, surpassing government bond maturities of $133.7bn. In the sukuk market, government maturities stood at $92.4bn, while corporate maturities totalled $78.6bn.

At the country level, Saudi Arabia is forecasted to record the highest fixed income maturities from 2025 to 2029, totalling $166bn. It is followed by the UAE and Qatar, with maturities of $146.8bn and $74.7bn, respectively. However, the majority of Saudi Arabia’s maturities are for government-issued bonds and sukuks ($96.7bn), whereas in the UAE, corporates account for the bulk of maturities at $119.1bn.

Kuwait has the smallest maturities in the five-year period at $13.2bn, while Oman and Bahrain are expected to see maturities of approximately $24bn each.