Monitoring Desk
ISLAMABAD: Auto financing in Pakistan has dropped by 5.75% YoY and 1.62% MoM in January 2023 to stand at around Rs 332bn, compared to Rs 352.24bn in January 2022 and Rs 337.47bn in December 2022, the latest data issued by State Bank of Pakistan (SBP) showed.
Higher interest rates led to decrease in auto financing
The decrease in auto financing is mainly attributed to higher interest rates, regulative curbs for acquiring loans, increase in car prices and higher taxes on the import of automobiles and their parts. To note, in this January, the sale of passenger cars dropped by 64.55% YoY and 56% MoM to stand at 6021 units in January 2023, compared to 16,985 in January last year and 13,780 in December last year.
Going by the State Bank of Pakistan data, consumer financing for house building stood at Rs 215bn by the end of January 2023, a jump of 42.24% YoY mainly due to the measures taken by the BSP to promote construction of buildings and housing in the country. However, on monthly basis, the financing for house building remained almost flat.
Meanwhile, financing for personal use clocked in at Rs 254.45bn, up by 4.15% YoY and 1.12% MoM compared to Rs244.3bn in January last year and Rs 251.62bn in December last year. This led the overall credit disbursed to consumers to rise to Rs 894.84bn during January 2023, recording a growth of 9% YoY while on monthly basis, it remained almost stable.
The outstanding credit to the private sector grew by 12.8% YoY to Rs8.4tr in January 2023 as compared to Rs7.46tr in the same month last year. On the other hand, the outstanding credit to the private sector shrank by 2.87% MoM as compared to Rs8.66tr.
Loans to the manufacturing sector surged by 14.55% YoY to Rs4.78tr in the review period while on monthly basis, the same witnessed a decline of 3.36% MoM.
The borrowing from the construction sector increased to Rs 192bn in January 2023, registering a growth of 12.85% YoY compared to Rs 170bn in the same month of 2022. Meanwhile, loans to the forestry, agriculture and fishing sector rose to Rs 339.69bn in the month under review, up by 11.78% YoY from Rs 303.87bn in January last year.
