Muscat – Aggregate bond and sukuk issuances across the GCC reached $116.8bn during the first half of 2026, up from $102.2bn in the corresponding period of last year, representing a year-on-year increase of $14.7bn, or 14.3%, according to a research report released on Wednesday.

The growth was driven primarily by double-digit increases in bond issuances by both sovereigns and corporates, which more than offset a broad-based decline in sukuk issuances across the region, according to Kamco Investment’s GCC Fixed Income Market report.

Government debt issuances rose to $42bn during the first six months of 2026 from $37.4bn in the same period of 2025, while corporate issuances increased to $74.8bn from $64.8bn a year earlier.

The report noted that total debt issuances across the GCC had reached a record $212.2bn during full-year 2025.

By instrument type, bond issuances recorded strong growth during the first half of 2026, while sukuk issuances declined sharply.

Aggregate GCC bond issuances totalled $86.4bn during the first six months of 2026, compared with $61.2bn in the corresponding period of 2025. In contrast, sukuk issuances fell by almost a quarter to $30.5bn, down from $41bn during the first half of last year.

At the country level, debt issuances registered broad-based year-on-year growth across the GCC, with the exception of a marginal decline in Bahrain.

Saudi Arabia remained the region’s largest issuer, with aggregate debt issuances reaching $52.3bn during the first half of 2026, compared with $50.7bn in the corresponding period of 2025, representing growth of 3.2%.

In absolute terms, Kuwait recorded the strongest increase, with issuances rising to $8.7bn during the first half of 2026 from $1.8bn in the same period last year. The UAE, Qatar and Oman also recorded increases in debt issuances, although the gains were comparatively modest.

Maturities, deficits to drive fresh issuances

According to Kamco Investment, the GCC is expected to witness elevated levels of bond and sukuk issuances during the remainder of the year, supported by sizeable debt maturities and ongoing financing requirements.

The report said refinancing needs are expected to total $30.7bn during the second half of the year, while government borrowing to finance budget deficits amid lower oil revenues is also likely to support issuance activity.

In addition, a series of reforms aimed at diversifying logistics and transportation infrastructure for crude oil trade is expected to generate further fundraising through bonds, sukuks and private placements.

Kamco Investment expects sukuk issuances to regain momentum during the second half of 2026, supported by strong demand from dedicated investors and issuers’ efforts to diversify funding sources.

However, the report warned that the principal downside risk remains a re-escalation of regional conflict, which could delay foreign-currency debt issuances and lead to wider credit spreads.

The report also highlighted that GCC governments face elevated debt maturities over the next five years, particularly for bonds issued in the years following the pandemic. According to Bloomberg data, GCC sovereign debt maturities amount to $236.6bn over the 2026-2030 period, while corporate maturities are slightly higher at $254.8bn.

Both bond and sukuk maturities are expected to remain elevated from 2027 through 2031 before gradually tapering over the remainder of the maturity profile. The report attributed the high volume of maturities over the next five years to the significant number of short-term debt issuances, with maturities of less than five years, by both governments and corporates.