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RIYADH: The UAE’s debt capital market is set to surpass $350 billion in 2026 and exceed $400 billion in the following years, supported by strong sukuk issuance, funding diversification and regulatory reforms, an analysis showed.
In a new report, Fitch Ratings said that outstanding debt in the UAE climbed past $325 billion at the end of 2025, marking a 9.3 percent increase from a year earlier.
The steady momentum in the Gulf Cooperation Council sukuk market highlights the region’s expanding debt markets, driven by domestic and international investors seeking diversification and stable returns.
Earlier this month, Fitch said in a separate report that Saudi Arabia’s debt capital market is projected to reach $600 billion outstanding in 2026, positioning the Kingdom as the largest US dollar debt and sukuk issuer among emerging markets.
Bashar Al-Natoor, Fitch’s global head of Islamic finance, said: “UAE’s DCM saw record high sukuk issuance in 2025, the highest-ever annual issuance. Dollar sukuk issuance rose to about 50 percent of dollar issuance, also the highest on record and up from 21.4 percent in 2024.”
He added: “Over 85 percent of Fitch-rated sukuk in the UAE are investment-grade, with 100 percent of issuers on Stable Outlooks and no defaults. The market saw many debut sukuk issuers.”
The country is expected to remain among the largest debt issuers in emerging markets and a leading global sukuk hub, underpinned by its Islamic finance ecosystem.
Among emerging markets excluding China, the UAE ranked as the fifth-largest US dollar debt issuer in 2025, accounting for 7 percent of issuance.
Dollar sukuk issuance in the UAE surged by more than 130 percent in 2025, while dollar bond issuance declined by 36 percent, Fitch said.
The UAE ranked as the world’s second-largest dollar sukuk issuer and the third-largest issuer of environmental, social and governance-linked sukuk in 2025.
“The UAE saw the emergence of digitally native notes, along with retail and fractional sukuk, which could improve settlement efficiencies and diversify the investor base,” added Fitch.
The report cautioned, however, that the UAE’s debt capital market remains sensitive to oil price movements, interest rate volatility, and geopolitical risks.