Saudi Arabia is poised to issue an additional $12.6 billion in sovereign bonds by the end of 2025, according to a recent research note published by JPMorgan. The projection comes as the Kingdom continues to navigate a complex macroeconomic landscape, shaped by lower oil revenues, increased public investment, and a persistent fiscal deficit forecasted at approximately $26.93 billion for the current fiscal year.
This anticipated bond issuance follows a robust start to the year in which the Kingdom had already raised $14.4 billion, making it the leading emerging market debt issuer during the first five months of 2025. Saudi Arabia’s aggressive debt strategy aligns with its broader national transformation agenda—Vision 2030—designed to pivot the economy away from its historical dependence on oil by channelling investment into strategic sectors such as tourism, advanced manufacturing, and technology.
The strategy, underpinned by structural economic reforms, reflects the Kingdom’s proactive approach in managing revenue shortfalls triggered by volatility in crude oil prices. As Reuters reported in April, falling oil prices have intensified pressure on Saudi authorities to either curtail spending or expand borrowing. The latter appears to be the preferred path, enabled in part by the Kingdom’s relatively low debt-to-GDP ratio and the continued confidence of international investors.
Despite a cautious environment marked by elevated borrowing costs and global economic uncertainty—further exacerbated by trade policy turbulence in the United States—Saudi Arabia’s ability to access international capital markets remains undeterred. JPMorgan observed that while emerging market debt issuance has been subdued over the past quarter, issuance activity could rebound in June if market stability holds. Nevertheless, the bank cautioned that market volatility remains a substantial risk to this outlook.
Corporate entities in the Kingdom, including Saudi Aramco, the world’s largest oil exporter, and the Public Investment Fund (PIF), have also been active in the debt capital markets. Saudi Aramco most recently secured $5 billion through bond issuance and has released a new Islamic bond (sukuk) prospectus, suggesting that further fundraising efforts may soon materialise.
The Kingdom’s regional peers are also preparing to re-enter international debt markets. Notably, Kuwait, the Middle East’s fourth-largest oil producer, is projected to issue $8 billion in bonds before the end of the year, following the recent passage of long-awaited public debt legislation. The law ends an eight-year hiatus from global bond markets and signifies renewed fiscal planning in the Gulf region.
As Saudi Arabia continues to roll out its economic diversification blueprint, its measured but assertive entry into the global debt arena signals both fiscal pragmatism and an evolving economic identity.
