Saudi Sukuk Market Set for Recovery in H2 2026

Saudi Arabia's sukuk market is expected to see a gradual recovery in the second half of 2026, as issuers across the Gulf return more actively to debt markets. Global sukuk issuance for the year is projected at between USD 270 billion and USD 280 billion, with a stronger pickup anticipated later in the year as market conditions stabilize.

The Kingdom has been the largest sovereign sukuk issuer since 2017, but a strategic shift in its funding approach is now the main driver behind an expected moderation in global long-term sovereign and supranational sukuk volumes, which are forecast to ease to around USD 110 billion in 2026. Under the government's latest annual borrowing plan, domestic sukuk will account for no more than 30% of total government financing in 2026, down from an average of 61% between 2020 and 2025.

Total Saudi sukuk and debt issuance fell 18% to USD 34.2 billion, from USD 41.3 billion in the most recently reported period before the second half of 2026. Despite this, outstanding Saudi debt capital market (DCM) volume has surpassed USD 520 billion — with sukuk making up about 62% of the total — and is expected to reach around USD 600 billion in 2026.

A Saudi US-dollar sukuk issuance of about USD 3.25 billion in early September 2026 is cited as supporting the market's expansion through the second half of the year and into 2027, linked to funding diversification and financing for rؤية السعودية 2030 projects. The Kingdom is expected to remain among the largest US-dollar debt and sukuk issuers in emerging markets.

For residents and the wider business community, a stable and deepening debt market underpins the financing behind major national projects and infrastructure. Local-currency sukuk markets are expected to remain a key engine of growth, while GCC debt capital markets overall are projected to reach around USD 1.25–1.3 trillion by 2026, with Saudi Arabia a leading contributor.

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