ISLAMABAD – Fitch Solutions, in its latest report, has said that the rapidpace of credit growth in the banking sector is expected to slow down incoming months as the effect of central bank’s tightening control in 2018begins to trickle in.
The research agency has projected loan growth at 13% in 2018, down from aforecast of 15% in 2018.
“Together with higher oil prices, this could create a downward cycle oflower loan growth, weaker asset quality, and reduced profitability andcapitalization,” said the report.
It has maintained its outlook for the broad economy and the industrieswithin Pakistan to deteriorate over coming quarters.
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“There will likely be a delayed negative effect as the government continuesto postpone much-needed fiscal austerity and economic rebalancing withunconventional methods,” says the report.
Nevertheless, credit growth is set to slow over the coming months as theeffect of the SBP’s monetary tightening begins to feed through.
