Global credit rating agency Fitch Ratings expects Saudi Arabia to maintain its dominance as one of the largest issuers of dollar-denominated debt and sukuk in emerging markets, driven by an ambitious strategy to diversify funding sources and meet the demands of major projects. This forecast comes amidst significant economic activity in the Kingdom, coupled with progressive regulatory initiatives and expectations of lower global oil and interest rates, creating a more attractive borrowing environment.
Record growth and future prospects
The agency predicted in its latest statement that the size of the outstanding Saudi debt market will jump to record levels approaching $600 billion by 2026. This figure reflects the huge size of financial activity in the Kingdom, as the data showed that dollar-denominated debt issuances have witnessed a remarkable increase of 49%, reaching a value of about $100 billion, which confirms the confidence of international investors in the financial solvency of the Saudi economy.
Economic context and Vision 2030
These figures cannot be viewed in isolation from the broader economic context of the Kingdom under Vision 2030. The expansion of the debt market is not only aimed at mitigating potential budget deficits resulting from fluctuating energy prices, but also serves as a strategic tool for financing mega infrastructure, tourism, and industrial projects spearheaded by the Public Investment Fund. The Saudi government, through the National Debt Management Center, is working to deepen the domestic and international debt markets to ensure sustainable financing and diversify the options available to both the public and private sectors.
Leadership in emerging markets
In its detailed analysis of the performance, Fitch stated that the total outstanding Saudi debt market exceeded $520 billion in 2025. The agency highlighted a significant achievement for the Kingdom, noting that last year it was the largest issuer of dollar-denominated debt in emerging markets (excluding China), capturing an 18% market share. This dominance reflects the success of Saudi fiscal policies in attracting foreign capital and channeling it into profitable investment opportunities.
Development of local issues and foreign investor confidence
Regarding domestic issuances, the agency highlighted a radical shift in the investor structure. Following a series of structural and legislative reforms that facilitated the entry of international financial institutions, foreign investors are now expected to contribute more than 10% of the government's total outstanding direct domestic issuances in key local markets by the end of 2025, a significant increase compared to the 4.5% recorded in 2024. This rise is a strong indicator of the maturing of the domestic sukuk and bond market and its increasing integration with the global financial system, which enhances liquidity and reduces the cost of financing in the long term.
