- Pakistani banks see stronger growth opportunities to come: Fitch.
- The World rating agency is improving overall commercial conditions.
- Said that the resumption of Pakistan has a difficult period of crisis.
The World Fitch Credit Setting Agency has planned the real growth of Pakistan Pakistan 3.5% by 2027, compared to 2.5% in 2024, according to Fitch Ratings.
“The improved sovereign credit profile of Pakistan is strengthening this point of view,” noted Fitch, referring to the upgrading of the country’s long -term rating (IDR) to “ B – ” / Stable of economic recovery, CCC + ‘in April 2025.
The recovery comes after a particularly turbulent period for the economy of Pakistan. Inflation, which culminated at 38% in May 2023, has since retired to 4.1% in July 2025, Fitch expecting that it is on average about 5% for the year.
Meanwhile, monetary policy has changed in response to the softening of inflationary pressures. Since May 2024, the central bank of Pakistan has halved the 11%policy rate, while external stability has improved thanks to a reduction in currency volatility and current account surpluses.
Fitch provides that this lower interest rate combination and a more stable macroeconomic environment will increase the demand for private credit.
“We expect the combination of lower interest rate and an improvement in the macroeconomic environment to stimulate the demand for private credit,” said Fitch, adding that this should support “the growth of more stable loans and deposits and the financial performance of banks”.
The agency noted that Pakistani banks should benefit from better opportunities to generate commercial volumes due to the improvement of operating conditions in the macroeconomic counterpart.
“The credit of the private sector, which had dropped to a cyclical hollow of 9.7% of GDP in 2024, should bounce back, reducing the dependence of banks with regard to public sector loans. Continuous economic and budgetary reforms could further support this change,” the statement said.
However, Fitch has also stressed continuous risks, declaring that the improvement of Pakistan, although still low, an operational environment and its low sovereign credit rating remain areas of concern.
The agency warned that the intrinsic solvency of the banks will remain “closely linked to the sovereign and to the rhythm of the economic reform”, because of their significant exposure to sovereign titles and the entities related to the State.
Despite the previous economic turbulence, the Pakistani banks have demonstrated resilience. The altered loan ratio in the sector improved at 7.1% by March 2025, compared to 7.6% at the end of 2023, in high loan growth of 26%, largely supplied by inflation.
