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