Fitch Ratings has flagged that Pakistan’s banking sector stands to benefit from improving economic conditions, buoyed by a sovereign rating upgrade to “B‑/Stable” in April 2025. The outlook comes amid signs of macroeconomic stabilization, including reduced inflation, lower policy rates, and better external balances.
These developments are expected to support growth in private-sector lending and overall bank performance. Banks have shown resilience, with non-performing loan ratios declining, while improved credit demand and borrower repayment capacity further bode well for the sector’s future.
Fitch sees bright prospects for Pakistan’s banks as economic recovery takes hold. Following a sovereign rating upgrade, lower inflation and policy rates are expected to boost credit demand and banking performance. Non-performing loans are falling, and private-sector lending is poised for growth, signaling a strengthening financial landscape.
Pakistan banking sector, economic recovery, private‑sector lending
