By Staff writer
Infrastructure projects to boost lending but subsidy cuts will impact on household spending, says BMI
Asset growth in Kuwait's banking sector will remain subdued in 2017, according to BMI Research’s latest analysis of Kuwait’s banking outlook.
Subsidy cuts are set to undermine household spending, although public investment will offer banks lending opportunities for large infrastructure projects.
“We believe that commercial banks in Kuwait will continue to face a challenging operating environment over 2017, as the government pushes ahead with ﬁscal consolidation,” BMI said in its note.
“This will temper household purchasing power and conﬁdence, weighing on consumer willingness to take out loans in the uncertain economic climate.”
Offsetting sluggish consumer demand for credit, government spending on infrastructure will help to boost corporate demand for loans. BMI predicts that asset growth will reach 5.2 percent year-on-year in 2017, compared with 5.0 percent in 2016.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.