Qatar’s sukuk and bond issuance has posted double-digit growth over the last several months.

From January to June this year, sukuk issuance surged by 122% year-on-year (YoY) to $500 million, while bond issuance rose by 59% to $12.4 billion, according to Fitch Ratings.

The Qatar Central Bank regularly issues treasury bills and sukuk, which provides domestic Islamic lenders a venue to invest their excess liquidity.

Overall, the debt capital market (DCM) issuance is expected to be broadly stable amid the government’s continued debt repayments and limited corporate DCM access, the ratings agency said.

Fitch expects Qatar to continue repaying maturing external debt this year ($4.8 billion), but it is also likely to refinance its $2 billion 2025 maturity in 2024 and gradually pay down some of its domestic debt.

Debt decreased by QAR27 billion ($7.4 billion) in 2023. It is forecast to dip to about 48% of GDP this year and 46% in 2025, compared to a peak of 85% in 2020.

The Gulf state’s DCM, which is the third-largest in the GCC after Saudi Arabia and the UAE, reached about $130 billion outstanding at the end of the first half of 2024, same as a year ago.

The state holds the bulk of the DCM, although Qatari lenders have also issued senior unsecured debt to extend their maturity profiles and diversify funding. Issuances by corporates have been small.

(Writing by Cleofe Maceda; editing by Seban Scaria) seban.scaria@lseg.com