Banking Sector Expects Benefits with CPEC Investments in Pakistan

Pakistan’s banks are likely to have their potential share in the development projects under China Pakistan Economic Corridor (CPEC) which will generate a new stream of revenues for them in the future.

Bilal Khan, Senior Economist Global Research at Standard Chartered Bank, MENA and Pakistan said Pakistani banks are flexing their muscles to have their share of financing in the upcoming mega projects.

He was of the view that the optimism of banks is not wrong because the improving ecosystem of development in the country will demand private sector to get their project financed through banks in coming years.

Banks are already actively participating in the development of economy showing the perpetual growth in the credit to private sector especially in the current financial year.

Though the major chunk of investment and financing are likely to be coming from Chinese companies and banks as it is under a general impression but the certain projects will be given supports by Pakistani banks through their financing—improving their businesses and profit margins in future.

The lower interest rates regime is also supporting the appetite of investment in the private sector which sets to expand their footprints to meet the demand of their customers in different sectors.

In future, the Dollar-Rupee parity, fiscal deficit, foreign exchange and external accounts will remain stable in next few months but disruptions could be seen in future with the changing scenario of global economy.

Definitely, foreign inflows through exports receipts and remittances will largely depend upon the situation of the global economy which will remain uncertain to direct any definite position to receivables of Pakistan, he said.

The external account may be under pressure as current account deficit will surpass to double the projection of the government from $3 billion to $6 billion in next​ financial year​s​. The GDP growth of Pakistan will settle more than 5 percent in the current financial year on the stable macro-economic indicators.

Dima Jardaneh, Executive Director, Head, MENA Economic Research said the global economy may take twist with the likely rebound of the international market which can affect over the growth of different economies across the world.

She said the US policy after new president Donald Trump is likely to be stable in near future however gradual effect could be seen in coming years.