UAE Outstanding Bonds And Sukuk Surpass $309.4 Billion By Q1 2025, Reports Fitch Ratings

The UAE's debt markets have shown significant growth, with outstanding bonds and Sukuk reaching $309.4 billion by the first quarter of 2025. This represents an 8.3 percent increase compared to the previous year, as reported by Fitch Ratings. Bashar Al Natoor, Managing Director and Global Head of Fitch Ratings' Islamic Finance Group, highlighted this trend in a discussion with the Emirates News Agency (WAM).

Al Natoor emphasised that the UAE's financial ecosystem is expanding, enhancing its strategic position in the Sukuk market. Sukuk made up 20.2 percent of the UAE's total outstanding debt, while conventional bonds comprised the rest. The country's role in the global Sukuk market remains substantial.

In terms of new issuances, the UAE issued $4.9 billion in Sukuk during Q1 2025, doubling from Q4 2024. Bond issuances were significantly higher at $24.1 billion. This positions the UAE as a major player in global debt markets, particularly in US dollar-denominated debt.

The UAE accounted for 6.5 percent of total global outstanding Sukuk as of Q1 2025, ranking fourth worldwide after Malaysia, Saudi Arabia, and Indonesia. This underscores its importance on the international stage in Islamic finance.

Regionally, the GCC's outstanding debt reached $1.03 trillion by Q1 2025. The UAE held a significant portion of this at 30 percent, making it second only to Saudi Arabia within the region. Its share of Sukuk in the Gulf was also notable at 15.6 percent.

In emerging markets excluding China, the UAE was one of the largest US dollar debt issuers with a 7 percent share in Q1 2025. It trailed only Saudi Arabia, Brazil, and Mexico in this category.

Focus on ESG Bonds and Sukuk

The UAE ranked third among emerging markets (excluding China) for ESG-related bonds and Sukuk issuance during Q1 2025. Türkiye and the Philippines were ahead in this segment, highlighting growing interest in sustainable finance within these regions.

This growth reflects broader trends towards integrating environmental, social, and governance considerations into financial products globally.

The data from Fitch Ratings illustrates how the UAE continues to strengthen its position within both regional and global financial landscapes through strategic growth in its bond and Sukuk markets.

With inputs from WAM