RIYADH: Gulf Cooperation Council countries accounted for over 35 percent of all emerging-market US dollar debt issued in the first quarter of the year— excluding China— marking a sharp increase from around 25 percent in 2024, a new report revealed. 

In its latest analysis, Fitch Ratings forecast that the share is expected to continue rising through 2025 and 2026 as regional governments and corporations increasingly turn to debt capital markets for funding diversification, project finance, and budget support amid fiscal pressures and global economic uncertainty. 

The report stated that the total value of the GCC DCM exceeded $1 trillion across all currencies by the end of the first quarter, marking a 10 percent year-on-year increase.

Issuance reached $89 billion in the first three months of the year, up 11 percent from the previous quarter but down 3 percent compared to the same period of 2024. 

Despite a slowdown in activity since early April, Fitch noted “a healthy pipeline” is developing, supported by strong regional and Islamic investor liquidity. 

“The GCC DCM continues to be fragmented among its six member countries in its maturity, depth, and credit profile, with Saudi Arabia and the UAE the most mature,” the report stated. 

“In Kuwait, Qatar, Bahrain, and Oman, the lack of a link with international central securities depositories such as Euroclear or Clearstream partly hinders foreign-investor participation in the local-currency DCMs,” it added. 

According to the global investment banking firm State Street Global Advisors, other regions saw divergent trends. Brazil led the emerging market in local bond returns with a 13.7 percent gain, driven by currency appreciation and rate hikes. 

In contrast, Turkiye posted an 8.7 percent decline, reflecting political instability and currency depreciation. These shifts underscore varying macroeconomic dynamics across emerging markets. 

In the Kingdom, foreign investors increased their participation in local government debt, accounting for 7.7 percent of the investor base at the end of the first quarter of the year, up from 4.5 percent in 2024. 

Fitch noted that pressure from declining oil prices — forecast at $65 per barrel for 2025 and 2026 due to OPEC+ cuts and trade-related volatility — could widen fiscal deficits and lead to increased borrowing. 

Among the most vulnerable are Bahrain and Saudi Arabia, while Qatar, Kuwait and Abu Dhabi benefit from substantial sovereign wealth assets. Oman is seen as relatively well-positioned fiscally. 

Interest rate expectations are also playing a role in shaping the DCM outlook. Fitch projects the US Federal Reserve to lower rates to 4.25 percent by end of 2025, with GCC central banks expected to follow suit. 

Lower rates could support further issuance, as banks and corporates across the region continue to diversify their funding strategies. 

Sukuk remains a cornerstone of the GCC’s DCM, comprising around 40 percent of the total outstanding by the first quarter of the year. 

The region holds over 40 percent of the global sukuk market, though issuance fell 51 percent year on year in the first quarter to $18.2 billion. 

Conventional bonds rose 29 percent over the same period. Fitch reported that 83.5 percent of Fitch-rated GCC US dollar sukuk are investment-grade, with 57.8 percent in the “A” category and the majority holding stable outlooks. 

Environmental, social and governance financing is also gaining traction in the region, with GCC countries’ ESG DCM surpassing $50 billion in all currencies by the end of the quarter. 

National-level regulatory reforms are also reshaping local markets. In Kuwait, the cabinet’s approval of a long-delayed financing and liquidity law is expected to unlock new borrowing capacity. 

In the UAE, the apex bank continues to advance the Dirham Monetary Framework, with the currency’s share in the domestic DCM growing to 24.9 percent from just 0.5 percent in 2020. 

Sustainable finance is also gaining momentum, with the UAE developing a Sustainable Islamic M-Bills program and Qatar unveiling a sustainable finance framework. 

Despite global uncertainty, Fitch emphasized the resilience of the region’s credit quality, noting that no Fitch-rated GCC sukuk or bonds defaulted in 2024 or the first quarter of 2025.

RIYADH: Jewelry spending in Saudi Arabia hit SR320.7 million ($85.4 million) between April 20 and 26, marking a weekly rise of 18.2 percent, according to the latest official figures.

The point-of-sale transactions bulletin issued by the Saudi Central Bank showed that this sector was one of the few that registered positive growth over the seven-day period.

The overall point-of-sale value decreased by 0.8 percent to SR11.3 billion during the week, with the number of transactions dropping 1.1 percent to 199.7 million.

Spending on electronics and electronic devices saw the second-largest increase, at 3.5 percent, to reach SR152.7 million. The number of transactions in this area increased 0.8 percent to 1 million.

Food and beverages spending followed with a 0.6 percent uptick to SR1.65 billion, accounting for the largest share of the week’s POS value.

Expenditure on education saw the biggest decrease, dipping by 17.5 percent to SR137.2 million, followed by hotels with a 13.7 percent drop to SR254.6 million.

Spending in restaurants and cafes saw a 2.1 percent fall to SR1.64 billion, although it still claimed the second-largest share of the POS value. Outlays on miscellaneous goods and services dropped 2.7 percent to SR1.34 billion.

Spending in the leading three categories accounted for approximately 40.8 percent, or SR4.6 billion, of the week’s total value.

Recreation and culture spending dropped by 7.4 percent to SR210.4 million, and expenditure on furniture decreased by 1.3 percent to SR224.9 million.

The clothing and footwear sector saw the smallest decline at 0.1 percent to SR607 million, with the number of transactions dropping by 1.9 percent to 4.6 million.

Geographically, Riyadh dominated POS transactions, representing around 36.1 percent of the total, with expenses in the capital reaching SR4.1 billion — a 0.1 percent increase from the previous week. 

Jeddah followed with a 0.5 percent decrease to SR1.7 billion; Dammam came in third at SR602.5 million, up 1.7 percent. 

Madinah experienced the most significant decrease in spending, dropping by 7.7 percent to SR421.1 million. Makkah followed with a 5.7 percent reduction to SR420.7 million.

Among Saudi cities, only Riyadh, Dammam, and Alkhobar experienced growth in transaction numbers. Riyadh reached 65.8 million transactions, reflecting a marginal uptick, while Dammam climbed to 8.5 million and Alkhobar to 4.5 million, marking modest gains compared to other regions.