By Sarah Townsend
GCC to register 4.9 percent loan growth in tough business conditions, says Coface
Overall loan growth in the GCC is expected to register “solid” growth of 4.9 percent in 2017, according to new research.
However, this is far lower than the average annual growth of 9.2 percent recorded between 2012 and 2016, research consultancy Coface said in its latest report.
Weak energy prices and lower government spending across the GCC are putting pressure on lending opportunities. This is slowing down government fiscal revenues, tightening liquidity in the banking sector and dragging down economic growth, the report said.
It added that interbank rates have increased and money supply has slowed across the region, and banks are likely to be “more selective” in granting loans.Seltem
Iyigun, an economist at Coface, said: “Restricted resources would make banks more selective on granting loans in 2017 and 2018.
“This would also limit access to funding for corporates, especially for small and medium-sized companies, as they represent higher risks.”
However, the overall GCC economy is expected to grow 2.1 percent in 2017 as oil prices start to recover, the report added.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.