GCC debt issuance to fall owing to rising oil prices
Higher oil prices, lower pandemic-related expenditure, and buoyant economic activity are poised to narrow the budget deficits of GCC oil producers, prompting most sovereigns to reduce their debt issuances going forward.
The downturn in bond issuances is forecast globally. Long-term sovereign Sukuk issuance across the world is set to drop to $73 billion in 2022 and $75 billion in 2023, from $88 billion in 2021, including issuance by multilateral development banks.
It is estimated that the aggregate fiscal deficit of major Sukuk-issuing sovereigns, including Saudi Arabia, Malaysia, Indonesia, and Turkey, will decline to $92 billion in 2022 from $118 billion in 2021 and $194 billion in 2020. The aggregate fiscal positions of the GCC sovereigns, excluding Kuwait, will improve to a surplus of $50 billion in 2022 from a surplus of $13 billion in 2021 and a deficit of $112 billion in 2020. These projections are based on the 2022 average oil price assumption of $75/barrel.
