RIYADH: accounted for 18.9 percent of the $250 billion US dollar debt issuance in emerging markets excluding China during the first half of 2025, Fitch Ratings said.
The share was slightly higher than the 18.5 percent recorded during the first five months of 2024, when total issuance, without China, reached $200 billion.
In the latest report, the US-based agency said that was followed by Brazil and the UAE, which accounted for 10.6 percent and 8.7 percent of the total issuances, respectively, during the first six months of 2025.
’s debt market has expanded rapidly in recent years, as both domestic and international investors seek diversification and stable returns.
Earlier in August, a report released by Kuwait Financial Center, also known as Markaz, said the Kingdom led the Gulf Cooperation Council region’s primary debt market in the first half of 2025, raising $47.93 billion through 71 bond and sukuk issuances.
Markaz added that also accounted for 52.1 percent of the total GCC issuances during the period, cementing its position as the region’s dominant fixed income market.
In its latest report, Fitch said that emerging market liquidity conditions have improved since US tariff plans were announced in April 2025.
It added: “Fitch considers that geopolitical risks in the Middle East remain high, and a resumption of military activity is possible. However, the DCMs (debt capital markets) were resilient to the conflict in June.
“There is renewed foreign investor interest in EMs, which we believe reflects a desire to diversify away from concentration in US assets given trade war uncertainties and the effects of a weaker dollar.”
According to the US-based credit rating agency, Mexico accounted for 7 percent of dollar debt issuances in emerging markets during the first half, followed by Turkiye at 6.7 percent, Indonesia at 6.4 percent, Malaysia at 4.1 percent, and Qatar at 3.2 percent.
Sukuk — Shariah-compliant financial instruments — accounted for 13.7 percent of all emerging market dollar debt issuance in the first half.
Growth in core Islamic markets
According to the latest analysis, US dollar debt issuance from emerging markets was resilient in the first half of this year, and issuers from the GCC countries, along with Malaysia, Indonesia, and Turkiye, accounted for just over half of such issuance during the period.
The report highlighted that large financing needs, diversification goals, and upcoming maturities are among the key drivers that propel the growth of dollar debt issuance in these core Islamic nations.
Affirming the growth of the debt market in , which is steadily pursuing its economic diversification journey, Kamco Invest noted in December that the Kingdom would lead the GCC region in bond maturities over the next five years, with about $168 billion in Saudi bonds expected to mature between 2025 and 2029.
The latest Fitch report further said that the GCC debt capital market crossed $1 trillion in outstanding volumes during the first half, with issuers from the region accounting for 35.5 percent of all emerging market dollar debt issuance.
The report added that this growth trend is expected to continue in the coming months, driven by .
“The Saudi DCM will grow on ambitious government projects under Vision 2030, deficit funding and diversification efforts. In the UAE, budget surpluses are expected, but growth will be propelled by funding diversification and the Dirham Monetary Framework implementation,” said Fitch.
The Dirham Monetary Framework is a key initiative introduced by the Central Bank of the UAE in 2017 for the purpose of enhancing monetary policy implementation and developing money markets in the Emirates.
Fitch added that Malaysia’s DCM issuance is likely to slow further as the government maintains efforts to reduce federal debt, while modest growth is expected in Turkiye during the final six months of 2025.
“Debt issuance in the second half of this year will be supported by a lower oil price, particularly for many OPEC members, and further interest rate declines. However, risks persist from US tariffs, geopolitical and capital market volatility, and, for sukuk, Shariah-compliance complexities,” added Fitch.
Sukuk dominates DCM in
The report further said that sukuk made up most of the outstanding DCM in at 61.1 percent.
In Malaysia, sukuk represented 59.3 percent of outstanding DCM, followed by the UAE at 21.9 percent, Indonesia at 18 percent and Qatar at 17.8 percent.
The report further added that environmental, social, and governance sukuk accounted for 41 percent of ESG dollar debt issuance in emerging markets, while the rest were in the form of bonds.
“Sukuk demand outpaced supply, supported by Islamic banks that have adequate liquidity in most markets and that cannot invest in bonds,” the report said.
Earlier this month, it was announced that the value of sukuk rated by Fitch Ratings exceeded $210 billion in the first half of 2025, marking a 16 percent increase from a year earlier.
At that time, the US-based agency said that 80 percent of its rated sukuk maintain investment-grade status with no recorded defaults, highlighting the relative stability and creditworthiness of issuers despite tightening global financial conditions.
In July, another report released by S&P Global said that the global sukuk market is poised to maintain its strength in 2025, with foreign currency-denominated issuances expected to reach between $70 billion and $80 billion.
