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UAE growth in credit demand slows in June quarter

UAE growth in credit demand slows in June quarter

The slowing was most evident in Dubai, according to a central bank survey

Growth in demand for business credit in the United Arab Emirates slowed during the three months through June, especially in Dubai, according to a central bank survey published on Thursday.

The net balance measure for business lending – the weighted percentage of respondents reporting an increase in demand for loans minus those reporting a fall in demand – fell to plus 3.1 in the quarter from plus 13.6 in the previous quarter.

The slowing was most evident in Dubai, where the net balance slipped to minus 0.9. However, the survey found respondents expect growth in overall UAE demand to rebound in the current quarter, with the net balance rising back to plus 10.4.

The survey also showed banks tightened credit standards further in the April-June quarter, “suggesting a higher degree of risk aversion in extending loans, especially to small and medium-sized enterprises”, the central bank said.

“For the September quarter, survey respondents expected further tightening in credit standards.”

Also read: Hiring in UAE’s non-oil private sector slows further in June

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