Today's Edition
MAYS IBRAHIM (ABU DHABI)
The UAE's debt capital market is expected to grow moderately through the second half of 2026 and into 2027, supported by funding diversification, cross-sector financing needs and regulatory reforms, Fitch Ratings said.
The ratings agency expects consolidated UAE government debt to rise to 25% of GDP in 2026, from 22.7% in 2025, while banks and corporates are likely to continue issuing debt opportunistically.
The UAE remained one of the largest US dollar debt issuers among emerging markets in the first half of the year, with total dollar debt issuance reaching $24 billion, up 40% from the second half of 2025 and 7% from the first half of 2025.
The increase was driven by a 108% surge in US dollar bond issuance, which more than offset a 48% decline in dollar-denominated sukuk issuance, Fitch said in its UAE Debt Capital Market Monitor H1 2026.
The UAE debt capital market grew 3% year-on-year to about $320 billion outstanding at the end of the first half, with around 74% denominated in US dollars and about 21% in sukuk.
The UAE was the fourth-largest emerging-market US dollar debt issuer excluding China during the first half, accounting for about 8% of issuance, while its debt capital market remained the second-largest in the GCC after Saudi Arabia.
Fitch said the UAE also maintained a key position in the global sukuk market, accounting for about 19% of global US dollar sukuk outstanding at the end of the first half, making it the second-largest market globally.
Nasdaq Dubai remained one of the world's leading venues for dollar sukuk, listing about 28% of global hard-currency sukuk outstanding.
It had around $110 billion of dollar debt listed at the end of the first half, with sukuk accounting for 77.5%.
Despite regional volatility, Fitch said UAE issuers generally maintained access to sukuk and bond markets, while market diversity increased through instruments including the first dirham digitally native notes, sovereign retail sukuk, blue and green bonds and certificates of deposit.
Credit fundamentals also remained resilient. About 82% of Fitch-rated UAE sukuk were investment grade at the end of the first half, down from 85% at the end of 2025, while no UAE issuer had its rating downgraded because of the US-Iran war.
Fitch expects issuance to remain sensitive to regional stability, oil prices and interest rate volatility. A more stable regional environment could support funding conditions, while renewed escalation in the US-Iran war could weigh on growth, according to the report.
