RIYADH: Qatar鈥檚 debt capital market is expected to exceed $150 billion in the medium term, supported by continued momentum in issuance across sovereign, bank, and corporate segments, according to a new analysis.

In its latest report, Fitch Ratings said the Qatari DCM expanded 13 percent year on year in the first four months of 2025, pushing outstanding volume to $131.8 billion.  

The analysis noted that sovereign issuers accounted for the majority with 60 percent, while banks and corporates contributed 26 percent and 14 percent, respectively. 

The study positions Qatar鈥檚 growth within broader Gulf Cooperation Council trends, where the region鈥檚 overall DCM surpassed $1 trillion as of November, driven by robust oil revenues. In a February update, Fitch projected that the GCC will continue to rank among the top emerging-market issuers of dollar-denominated debt through 2025.

On Qatar鈥檚 DCM growth, Fitch stated: 鈥淪ukuk, ESG (environmental, social, and governance), and Qatari riyal market penetration are on an upward trajectory. The potential development of digital government bonds, as part of the Qatar Central Bank鈥檚 Central Bank Digital Currency project, can support the market鈥檚 depth and sophistication.鈥�  
 
The DCM, which involves the trading of securities like bonds and promissory notes, serves as a key mechanism for raising long-term capital for both businesses and governments. 

Qatar ranks as the third-largest DCM source in the GCC, holding a 13 percent regional share by the end of April. However, issuance volume dropped to $9.6 billion in the first four months of the year, a 36 percent decline from the same period in 2024. 
 
The share of sukuk in the DCM rose to 16.9 percent or $22 billion, but sukuk issuance slumped 86 percent year on year. Bond issuance fell 18 percent during the same period. 
 
鈥淔itch鈥檚 base case is that the government is going to refinance upcoming external market debt maturities and tap markets to cover a small budget surplus in 2025 under the assumption of a Brent oil price of $65 per barrel (excluding QIA investment income), while banks and corporates are likely to continue to diversify funding sources,鈥� the report stated.  
 
While 67 percent of outstanding Qatari DCM remains US dollar-denominated, 28 percent is in riyals. In 2024, approximately 90 percent of the sovereign鈥檚 bond issuance and all sovereign bond sukuk were riyal-denominated. 

The report highlighted that ESG debt is becoming a key dollar funding tool, accounting for almost 30 percent of all dollar DCM issuance in 2024. ESG DCM volume hit $4.1 billion by April, rising 204 percent year on year, with sukuk accounting for 18 percent. 
 
Qatar鈥檚 debt-to-GDP ratio is expected to rise to 49 percent in 2025 before falling below 45 percent by 2027 on the back of increased gas output and associated budget surpluses. 

Fitch projects the US Federal Reserve will cut interest rates to 4.25 percent by the end of 2025, a trend the Qatar Central Bank is likely to follow. 

In a separate February report, the agency forecast 黑料社区鈥檚 DCM would hit $500 billion by end-2025, spurred by the Kingdom鈥檚 Vision 2030 diversification plan.