Fitch Ratings has assigned 'neutral' 2026 sector outlook for the Gulf Cooperation Council (GCC) Corporates sector, reflecting 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, Fitch says in a report published today.

"We project GCC non-oil GDP growth at 3.7% in 2026 (from 4.2% previously), with non-energy sectors benefitting from state-led programmes in infrastructure and tourism. 

"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. 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," Fitch says.

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 programmes, the report says. 

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. 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, the report added.  -TradeArabia News Service