Kuwait maintains comparatively low national debt levels amidst an expected increase in public debt projections within the Arab region.
In the dynamic landscape of the Middle East, the public debt-to-GDP ratios of three significant countries – Kuwait, Saudi Arabia, and the United Arab Emirates (UAE) – have been under close scrutiny. As of 2025, these ratios are projected to paint a distinct picture, with each nation exhibiting unique trends in debt management.
Kuwait, historically known for maintaining single-digit public debt-to-GDP ratios, is expected to see an increase from 2025 onwards due to expanded government infrastructure spending and economic diversification efforts. The Kingdom, which currently stands at 3.04%, is planning to raise up to $6 billion from international debt markets through a dollar-denominated bond issuance, marking its first international bond sale since 2017.
Saudi Arabia, on the other hand, has a higher ratio of 26% in 2024, with increasing debt issuance planned to cover a growing budget deficit that has doubled from 2.5% of GDP in 2024 to nearly 5% in 2025. Despite this, Saudi Arabia's net debt remains modest at 17% of GDP, reflecting a strong fiscal position and room for borrowing.
The UAE, while not directly providing exact debt-to-GDP ratios, is part of the Gulf Cooperation Council (GCC) group whose public spending is increasing to $542 billion in 2025. The UAE's status as a global hub for trade and investment contributes to its strong fiscal standing, as evidenced by a projected 7.1% budget surplus in 2024 and net foreign assets estimated at 157% of GDP.
In comparison, Kuwait maintains the lowest public debt-to-GDP ratio among the three, historically in single digits, but is expected to see a rise due to infrastructural and economic expansion from 2025 onwards. Saudi Arabia has a higher ratio, with a growing debt issuance planned, while the UAE is managing moderate debt levels, financing deficits through reserves and debt as common in the region.
It is essential to note that the public debt-to-GDP ratio is a key indicator used by financial and economic authorities to gauge a country's capacity to manage and repay its debts. In this context, Kuwait, Saudi Arabia, and the UAE each demonstrate distinct approaches to debt management, balancing fiscal responsibility with developmental needs.
In the context of their respective financial strategies, Kuwait plans to issue a dollar-denominated bond to fund infrastructure and economic diversification projects, which may increase its public debt-to-GDP ratio beyond its historical single-digit levels. On the other hand, Saudi Arabia, currently with a higher ratio, is planning to issue more debt to cover a growing budget deficit, while the UAE, though not providing exact ratios, is managing moderate debt levels, financing deficits in a manner common in the region, highlighting a focus on both fiscal responsibility and developmental needs.
