RIYADH: Gulf Cooperation Council banks are projected to issue over $30 billion in US dollar-denominated debt in 2025, following a record $42 billion in 2024, Fitch Ratings said in a new report. 

The surge in debt issuance is set to be driven by nearly $23 billion in maturing debt, lower US dollar interest rates, and strong regional credit demand, particularly in Saudi Arabia and the UAE. 

This comes as GCC banks accounted for 18 percent of total US dollar debt issuance by emerging-market banks in 2024, with this figure rising to 36 percent if Chinese banks are excluded. Favorable global financing conditions, supported by high oil prices expected to stay around $70 per barrel in 2025, are expected to continue to bolster investor confidence in the region. 

“We expect Saudi banks’ US dollar debt issuance to continue representing a high proportion of overall GCC issuance given the country’s strong credit growth outlook, especially in the corporate segment, and the banks’ increased use of external funding due to high competition for liquidity locally,” stated Fitch Ratings. 

Last year, GCC banks broke their previous debt issuance record of $25.6 billion set in 2020. This increase was largely attributed to strong credit growth in Saudi Arabia, banks’ efforts to diversify funding sources, and high debt maturities. The issuance of certificates of deposits alone totaled $8.6 billion, benefiting from investor optimism and the region’s economic stability, the report noted. 

Saudi and UAE banks were the leading issuers, each accounting for around a third of total GCC debt issuance. Saudi banks, in particular, have become active in international debt markets since 2020, using external funding to support aggressive growth strategies, diversify funding bases, and meet rising foreign currency demands. 

Short-term CDs were a key instrument in GCC banks’ debt strategies in 2024, accounting for about 21 percent of total debt issuance. Key financial hubs such as New York, London, Hong Kong, and Singapore facilitated much of this activity, broadening investor bases and enhancing liquidity options. 

The report noted that Islamic finance stayed strong, with sukuk issuance accounting for nearly half of the total 2024 issuance, excluding CDs. The growth in sukuk highlights its appeal to shariah-compliant investors and competitive pricing that makes it an attractive funding instrument for regional banks. 

Fitch expects Saudi banks to maintain a dominant share of GCC debt issuance in 2025, driven by strong credit growth in the corporate sector and increasing competition for local liquidity. 

In 2025, GCC banks will face substantial debt maturities, with Qatari banks expected to account for one-third of the $23 billion due. Saudi and UAE banks will each represent about a quarter of the maturing debt. 

Despite global economic uncertainties, Fitch stated that GCC banks are expected to leverage their solid credit ratings and favorable economic conditions to secure advantageous financing terms. 

Sukuk issuance is expected to grow further as banks tap into the expanding pool of shariah-compliant investors. Fitch said the continued use of short-term instruments like CDs will provide banks with greater flexibility in managing funding needs and expanding their global investor base. 

Additionally, GCC banks are expected to issue $2.2 billion in additional Tier 1 instruments with first call dates in 2025, followed by $3.1 billion in 2026. This will further support debt issuance, as most GCC bank AT1s are likely to be called due to favorable financing conditions. 

AT1 issuance reached $5 billion in 2024, up from $1.7 billion in 2023, marking the highest level since 2021. This surge was driven mainly by Saudi banks. 

As GCC banks continue to play a key role in regional economic growth, their strategic debt issuance and diversified funding solutions are expected to drive further financial stability and market confidence in 2025. 

RIYADH: Egypt has unveiled the second edition of its National Artificial Intelligence Strategy 2025–2030, signaling its ambition to become a leading AI hub in the Middle East and Africa.

Building on the initial strategy launched in 2021, the updated framework, revealed by the National Council for Artificial Intelligence, focuses on six core pillars, including governance, technology, and data, as well as infrastructure, ecosystem, and talent.

These components aim to support the country’s “Digital Egypt” initiative and drive socio-economic growth, with the goal of enabling the establishment of over 250 successful AI companies.

The move aligns with Egypt’s target to raise AI’s contribution to GDP to more than $42.7 billion by 2030, or 7.7 percent of the total.

This comes as AI is projected to add $15.7 trillion to the global economy by 2030, with the Middle East capturing 2 percent, or $320 billion, according to a PwC report. Saudi Arabia is set to gain the most, with AI contributing over $135.2 billion, or 12.4 percent of GDP. The UAE is expected to see the largest relative impact, with AI accounting for nearly 14 percent of its GDP, the report added.  

“We live in an era where AI is at the heart of global development, leaving its mark on every aspect of life and unlocking unparalleled opportunities for sustainable progress and growth. As the pace of advancements in this technology accelerates, it becomes imperative that we fully realize the vast potential of AI to shape a bright future for our nation–one that we can all take pride in,” said Egyptian President Abdel Fattah El-Sisi in his opening statement.  

He added that the second edition builds upon the foundation laid by the launch of the first National AI Strategy in May 2021, a moment when Egypt began exploring and harnessing AI capabilities.

“This included integrating AI tools into education, enhancing professional development, and fostering robust international partnerships,” said the president. 

The strategy also revealed that up to 26 percent of Egypt’s workforce, considered a marginal population, is expected to benefit from AI tools and applications. The number of AI professionals and experts is forecasted to reach 30,000 by 2030.

AI technology, including generative AI, is projected to further propel academic research, doubling the current number of AI publications to 6,000 per year, establishing Egypt as a regional research cooperation center.  

“We remain steadfast in our pursuit of excellence in this transformative field. Our goal is to solidify Egypt’s position as a leader in AI within the Middle East and Africa and as an influential contributor on the global stage,” El-Sisi said. 

“We will continue to prioritize investments in skill development and capacity building, cultivating AI professionals who meet the highest international standards,” the president added.