BAKU, Azerbaijan, February 11. Average annual nominal credit growth in Central Asia and the Caucasus will be around 10-15 percent in 2023, Trend reports, citing the S&P Global's outlook on banking sector in the region.
"We expect good macroeconomic growth prospects to result in average nominal credit growth in the region of about 10-15 percent in 2023, supported by corporate growth, consumer and mortgage loans under State support programs," the agency said.
According to S&P Global, given higher inflation rate, real credit growth is likely to be in low single digits, while banks will be able to manage the associated risks.
At the same time, the agency noted that credit quality indicators in the region are expected to remain stable on average or to continue to improve in 2023.
The macroeconomic situation is generally favorable, even if economic growth is lower than in 2022, the report added.
Meanwhile, some factors may lead to a deterioration in S&P Global's baseline scenario, in particular weaker than expected macroeconomic growth in the region, for example, due to a deterioration in global economic growth prospects, or dramatically increasing geopolitical risks.
"Higher-than-average inflation in the region may also reduce the creditworthiness of companies and households. As a positive factor, we note that the countries of Central Asia and the Caucasus are less affected by the increase in energy prices than the European countries due to their own energy sources in Azerbaijan, Kazakhstan and Uzbekistan," the agency pointed out.