GCC Sukuk Market Skyrockets to $1.1 Trillion Value

Prime Highlight

GCC sukuk outstanding climbed 7% to $1.1 trillionby Q3 2025, driven by strong Islamic debt issuance from Saudi Arabia and the UAE.
Fitch Ratings expects GCC debt market activity to remain robust into 2026, supported by high credit quality and strong investor demand for Shariah-compliant financing.

Key Facts

Sukuk issuance grew 22% year-on-yearin the first nine months of 2025, taking a 40% share of the region’s total debt markets, outperforming conventional bonds at 7.2%.
Saudi Arabia holds 46%of the GCC debt market and the UAE 30%, while ESG-linked debt reached $62.8 billion, with sukuk making up nearly half.

Background

Gulf Cooperation Council sukuk outstanding increased 12.7% to reach $1.1 trillion by the end of the third quarter of 2025, driven mainly by strong Islamic debt issuance from Saudi Arabia and the UAE. Fitch Ratings’ latest report shows that governments and companies in the region keep seeking Shariah-compliant financing as they diversify their funding sources.

Fitch said overall debt capital market activity in the GCC is set to remain strong going into 2026, supported by a solid pipeline of expected issuances. Sukuk issuance grew 22% year on year in the first nine months of 2025, taking a 40% share of the region’s total debt markets. This growth clearly outpaced conventional bonds, which expanded 7.2% during the same period.

Sukuk, also called Islamic bonds, let investors partly own the issuer’s assets until the bonds mature. More investors are buying them because they want steady, diversified returns, especially in markets like Saudi Arabia, where debt programs are growing.

Bashar Al-Natoor, global head of Islamic Finance at Fitch Ratings, said the GCC debt market is likely to stay resilient into next year. He noted that more than 81 percent of rated dollar sukuk in the region are investment grade, showing the strong credit quality of issuers. However, he also pointed out that the GCC debt market remains uneven, with Saudi Arabia and the UAE being the most developed among the six member states.

Fitch added that GCC countries accounted for 32% of all emerging market US dollar debt issued in the first nine months of 2025. Growth in 2026 will be supported by government plans, funding needs, economic diversification, and major project pipelines.

Saudi Arabia led the region’s debt market with a 46% share, and the UAE came next with 30%. ESG-linked debt grew to $62.8 billion by September, and sukuk made up nearly half of it.