Saudi Arabia Increases Debt Issuance to Fund Ambitious Vision 2030 Projects

13 Jun, 2024

Saudi Arabia Increases Debt Issuance to Fund Ambitious Vision 2030 Projects

GCC governments have issued approximately $45 billion in bonds and sukuk this year, marking the highest level since 2020. Sovereigns, buoyed by average oil prices of $83 per barrel, are poised for budget surpluses in 2024, notably in the UAE and Qatar. The capital raised primarily aims to establish benchmark yield curves for corporate debt pricing and fund eco-friendly projects in Qatar. Notably, Saudi Arabia leads issuance with over $35 billion, predominantly in dollar-denominated debt, and saw additional capital raised from Aramco shares. The Saudi budget, despite a projected deficit of 4.2% of GDP, is expected to be covered by raised funds, with potential future market taps indicating excess capital beyond budgetary needs. The Public Investment Fund has also raised $8 billion through bonds and sukuk to drive Saudi Arabia's infrastructure investments, crucial for economic diversification. Significant project awards and a substantial pipeline underscore Saudi Arabia's commitment to international events and infrastructure needs, with funding requirements anticipated to extend beyond 2024. GCC bond and sukuk issuance is likely to remain robust, driven by Saudi Arabia, PIF, and related entities in the coming years.