Saudi debt capital market likely to cross $500B by 2025-end: Fitch

In an emailed statement to Argaam, the rating agency said this is supported by the funding diversification across sectors, deficits and project financing under Vision 2030, and regulatory initiatives. However, global volatility, exacerbated by US tariff hikes, has led to a quieter period in the primary US dollar market.

Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings, stated that the Saudi entities were the largest US dollar debt issuers among emerging markets (excluding China) in Q1 2025. The country also led dollar sukuk issuance globally, and was the largest GCC DCM issuer.

“We expect lower oil prices and increasing deficits will drive issuance in 2025 and 2026. Banks, corporates, and projects are likely to seek more diverse funding through the DCM, enhancing market development. We rate about 80% of the outstanding US dollar Saudi sukuk market, with almost all investment-grade and no defaults,” he added.

Tariff-related volatility and faster-than-anticipated OPEC+ production cuts have put pressure on oil prices.

Fitch forecasts Saudi Arabia's budget deficit to widen to 5.1% of GDP in 2025, from 2.8% in 2024, as oil prices and dividends from Saudi Arabian Oil Company fall. Moreover, it projects government debt/GDP to rise to nearly 37% by end-2026 (from 29.9% in 2024).