The UAE’s debt capital market grew by 3% year over year to around $320 billion in outstanding debt by the end of the first half of 2026, while U.S. dollar debt issuance reached $24 billion, according to Fitch Ratings.
U.S. dollar debt issuance during the first six months of the year was 40% higher than in the second half of 2025. Fitch expects the market to continue growing at a moderate pace during the rest of 2026 and in 2027, supported by the need for diversified funding, financing requirements across different sectors and regulatory reforms.
Fitch expects the UAE government’s consolidated debt to increase to 25% of gross domestic product in 2026, up from 22.7% in 2025. Banks and companies are also expected to continue issuing debt when market conditions are favorable.
The UAE’s debt market is expanding as governments and companies across the Gulf continue to use bonds and sukuk to diversify their funding sources and meet financing needs. The growth also reflects efforts to strengthen local debt markets and improve the region’s access to international investors.
Sukuk accounted for 21% of the UAE’s total outstanding debt at the end of June, while more than 70% of the market was denominated in U.S. dollars.
Bashar Al-Natoor, Fitch’s global head of Islamic finance, said UAE issuers generally maintained access to financial markets during the first half of 2026 despite regional volatility.
He said the market had become more diverse, with issuances including the first digitally native notes in UAE dirhams, sovereign retail sukuk, blue and green bonds, and certificates of deposit.
Fitch said UAE issuers remained among the largest emerging-market issuers of U.S. dollar bonds and sukuk during the first half of the year, despite regional uncertainty caused by the Iran war.
During the disruption, some issuers turned to private placements and syndicated financing to meet their funding needs. However, issuance in Emirati dirhams by entities outside the government remained limited.
More than 80% of the UAE sukuk covered by Fitch had investment-grade ratings, and no defaults were recorded. However, the share of sukuk issuers with stable outlooks fell to 81% during the first half of the year.
Fitch said liquidity in its rated UAE sukuk improved in August compared with March but remained below the level recorded before the conflict in January. The agency also placed Ras Al Khaimah and several corporate and sukuk issuers on Rating Watch Negative.
Fitch said the short-term outlook for debt issuance will partly depend on regional stability. Better conditions could create a more favorable environment for raising funds, while renewed tensions could slow market growth. The debt market is also affected by changes in oil prices and interest rates.
According to a July report by Kuwait Financial Centre, or Markaz, total bond and sukuk issuance across the Gulf Cooperation Council reached $102.69 billion during the first half of 2026, up 6.5% from the same period last year.
The UAE was the GCC’s second-largest issuing market after Saudi Arabia. According to Markaz, UAE entities raised $25.45 billion through 58 issuances, accounting for 24.8% of total Gulf issuance. However, this was 6.8% lower than the amount raised during the same period in 2025.
The difference between Markaz’s $25.45 billion figure and Fitch’s $24 billion figure is that Markaz includes primary bond and sukuk issuance in all currencies, while Fitch covers only U.S. dollar debt issued by UAE entities.
Separately, Nasdaq Dubai recorded 33 fixed-income listings worth $13.8 billion during the first half of the year. The total value of outstanding debt listed on the exchange reached $141 billion, including $98.6 billion in sukuk and $42.4 billion in bonds.
