DUBAI, June 3 (Reuters) - Saudi Arabia is expected to

issue $12.6 billion in bonds for the remainder of the year,

JPMorgan ( JPM ) said on Tuesday, as the kingdom resorts to the debt

markets amid huge investments to overhaul its economy and lower

oil prices.

The Gulf country, which forecasts a budget deficit of $26.93

billion this year, is seeking funds to invest in new industries

and wean its economy away from oil under its Vision 2030 plan,

investing in sectors such as tourism, manufacturing and

technology.

Reuters reported in April that Saudi Arabia, with its wealth

linked inextricably to oil revenue, faces mounting pressure to

raise debt or cut spending after a plunge in crude prices.

The kingdom enjoys a low debt-to-GDP ratio and confidence

from lenders, and was among the largest emerging market debt

issuers in 2024.

It has already issued $14.4 billion so far this year, JPM

said in a research note, the largest emerging market issuer in

the first five months of 2025, braving market volatility ignited

by U.S. President Donald Trump's trade policies.

"An uncertain global macro environment and higher borrowing

costs have remained deterrents for new issue activity over the

past three months" out of emerging markets, JPM said.

The bank said that "supply activity could pick up in June,

provided market conditions remain stable," warning, however,

that volatility remained a key risk.

Companies in Saudi Arabia, including state oil giant Aramco

and sovereign wealth fund PIF, have also been tapping the debt

markets.

Saudi Aramco last week raised $5 billion from bonds and

published a new prospectus for Islamic bonds, signalling a new

issuance could be on the horizon.

JPM said on Tuesday that other emerging markets countries

with "the largest issuance expectations from now until year-end"

included neighbouring Kuwait, forecasting $8 billion in debt

issuance by year-end.

The small Gulf state, also the Middle East's fourth-largest

oil producer, earlier this year issued a long-awaited law to

regulate public borrowing as the country prepares for a return

to international debt markets after eight years.