The Gulf Cooperation Council (GCC) corporates sector indicates stable profits as a result of government-initiated capex in infrastructure and energy. According to top ratings agency Fitch, the strict fiscal flexibility and lower oil-price assumptions will temper budgets and activity.
Fitch Ratings, in its ‘neutral’ 2026 sector outlook, reported, “We project GCC non-oil GDP growth at 3.7% in 2026 (from 4.2% previously), with non-energy sectors benefitting from state-led programs in infrastructure and tourism.”
The initial public offering and debt capital market (DCM) pipelines performed strongly into 2026, and refinancing risk stood moderate level. It has been stated that the sub-investment-grade credits experience diminishing leverage headroom and increased interest-rate sensitivity.
However, greater-than-anticipated funding expenses have the potential to bring DCM access to non-government-related entity issuers. Ratings report added that it anticipates that order backlogs of corporates will be robust in 2026 despite the possible delays in mega projects.
The capex intensity will increase in 2026, and free cash flow will remain low. Issuers are using asset-light strategies (e.g., joint ventures) and funding levers such as hybrids, equity issuances, and non-core disposals are being used by issuers to manage investment programs.
Therefore, the leverage remains more stable, and the average net debt/ebitda is set to decrease to 2.3x in 2027 from 2.4x in 2026.
The report indicated that the refinancing risk is low, with maturity walls extended to 2028 and no significant maturities during the next 24 months on investment-grade credits.
TradeArabia News Service stated that the prudent expenditure and possible variations in the financial policy at the state level may postpone the initiation of investments in mega projects, impacting the order backlog and cash flow visibility of the private economy.
