The Gulf Cooperation Council (GCC) corporates sector reflects steady earnings due to ongoing government-led capex in infrastructure and energy. However, tighter fiscal flexibility and lower oil-price assumptions will temper budgets and activity, according to top ratings agency Fitch.

"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, stated Fitch Ratings in its 'neutral' 2026 sector outlook.

The initial public offering and debt capital market (DCM) pipelines remain robust into 2026, and refinancing risk remains moderate. However, sub-investment-grade credits face shrinking leverage headroom and greater interest-rate sensitivity, it stated. 

Higher-than-expected funding costs that could curb DCM access for non-government-related entity issuers. We expect order backlogs for corporates to remain resilient in 2026 despite potential delays in mega projects, it added.

Capex intensity is set to rise in 2026, keeping free cash flow subdued. Issuers are using asset-light strategies (e.g. joint ventures) and funding levers such as hybrids, equity issuances, and non-core disposals to manage investment programs. Leverage is broadly steady, with average net debt/ebitda easing to 2.3x by 2027 from 2.4x in 2026. Refinancing risk is modest, with maturity walls pushed to 2028 and no material maturities for the next 24 months among investment-grade credits, said the report. 

Cautious spending and potential changes in state-level financial policies could delay the deployment of investments in mega projects, affecting order backlogs and cash flow visibility for the private sector, it added.-TradeArabia News Service