RIYADH: The United Arab Emirates’ debt capital market reached about $320 billion at the end of the first half of 2026, marking a 3 percent increase from a year earlier, Fitch Ratings said.
US dollar debt issuance by UAE entities rose sharply to $24 billion during the six month period. This was 40 percent higher than the amount recorded in the second half of 2025.
Fitch expects the market to grow moderately through the rest of 2026 and into 2027. The expansion is likely to be supported by the need for funding across different sectors, efforts to diversify borrowing sources and continuing regulatory reforms, according to Arab News.
The agency forecast that consolidated UAE government debt would rise to 25 percent of gross domestic product this year, compared with 22.7 percent in 2025. Banks and companies are also expected to return to the market when suitable opportunities arise.
More than 70 percent of the UAE’s debt was denominated in US dollars at the end of June, while sukuk accounted for 21 percent of total outstanding debt. Fitch said UAE issuers continued to access international markets despite regional instability linked to the Iran war.
Bashar Al-Natoor, Fitch’s global head of Islamic Finance, said the market had become more diverse. New products included dirham-denominated digital notes, sovereign retail sukuk, and blue and green bonds.
Some borrowers relied on private placements and syndicated financing during periods of disruption. However, issuance in Emirati dirhams by non-government entities remained limited.
Fitch said more than 80 percent of the UAE sukuk it covered were investment grade, with no defaults reported. Nevertheless, the share of issuers with stable outlooks fell to 81 percent during the first half.
The market’s future will depend partly on regional security, oil prices and interest-rate movements. Improved stability could encourage further borrowing, while renewed tensions may slow growth.
Across the Gulf, bond and sukuk issuance reached $102.69 billion in the first half, according to Kuwait Financial Centre. The UAE was the GCC’s second-largest issuing market after Saudi Arabia.
