Private sector credit demand showed signs of slowing in September, falling short of the recent high recorded in August, according to data from the Central Bank. In October, credit to the private sector increased by Rs. 89 billion, reflecting an 8.9% year-on-year growth. This was a decrease compared to the Rs. 135 billion growth seen in August.
As of October, the cumulative outstanding credit to the private sector stood at Rs. 7.796 trillion, a slight increase from Rs. 7.707 trillion in August. Despite this slowdown in credit growth, analysts noted that private sector credit demand remains strong, driven by lower market lending interest rates and expectations of a recovery in domestic economic activity.
The trend suggests that while the pace of credit expansion has moderated, the underlying demand for credit continues to be supported by favorable lending conditions and optimism for future economic recovery.