Salman Khan
ISLAMABAD: Moody’s Investor Service on Wednesday forecast Pakistan economy will grow by 1.5pc during the current fiscal year and found Pakistani banks to be stable owing to government support but banking sector risks were growing.
“Economic activity will remain below pre-outbreak levels, although the economy should return to modest 1.5pc growth in fiscal year 2021,” Moody’s said in its outlook for the Pakistani banking sector. This is generally in line with 1.5-2.5pc growth forecast for Pakistan GDP by the State Bank compared to World Bank’s 0.5pc GDP growth rate for the current fiscal year.
Long-term credit growth potential for Pakistani banking system was strong, given Pakistan’s large unbanked population, the agency said. The stable outlook reflected banks’ solid funding and liquidity, although a challenging but improving operating environment will weigh on asset quality and profitability.