The Gulf Cooperation Council (GCC) nations are gearing up for a financial takeover of the emerging-market US dollar debt landscape, with Saudi Arabia and the UAE leading the charge. As 2025 unfolds, the region’s financial markets are set to witness an unprecedented wave of debt issuance, cementing their status as a global powerhouse in economic expansion and investment.
With sukuk (Islamic bonds) taking center stage, the GCC continues to dominate the financial world, riding on the back of sustainability-driven Environmental, Social, and Governance (ESG) debt and favorable economic conditions. In 2024 alone, GCC countries accounted for a quarter of all emerging-market US dollar debt issuance (excluding China), with the numbers skyrocketing by 65.8% year-on-year. Now, with $30 billion in bank debt issuance lined up for 2025, the region is preparing to unleash a financial revolution.
One of the major catalysts for this growth is falling oil prices. While this might seem like a setback for the region’s traditionally oil-dependent economies, it has triggered a wave of borrowing as governments seek to finance ambitious infrastructure projects and economic diversification plans. With lower interest rates expected from the US Federal Reserve, GCC central banks are likely to follow suit, creating an even more attractive borrowing environment.
At the heart of this financial boom is Saudi Arabia, holding the largest share of GCC debt capital markets (DCM) at 44.8%, followed by the UAE at 29.9% and Qatar at 12.8%. Meanwhile, Kuwait is making waves, emerging as the third-largest GCC dollar debt issuer in 2024, with issuances hitting $13.6 billion.
Beyond just numbers, the GCC’s financial growth is powered by sustainable finance, with ESG debt surpassing $50 billion by early 2025. The UAE and Saudi Arabia are leading this charge, attracting global investors from the US, Europe, and Asia, all eager to tap into the region’s booming green finance sector.
With trillions in outstanding debt, a surging sukuk market, and a borrowing boom in motion, the GCC is rewriting the financial rulebook, proving that the future of global debt markets is being shaped in the Middle East! 🚀💰♻️
