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Auto financing in Pakistan drops for 19th consecutive month

Auto financing in Pakistan drops 1.45% MoM to Rs239bn in March
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February 20, 2024 (MLN): Automobile financing in Pakistan has dropped to Rs246.26 billion in January 2024, witnessing a decline of 25.82% YoY and 1.98% MoM compared to Rs331.98bn in January 2023 and Rs251.25bn in December 2023, respectively, the latest data released by the central bank showed.

It is important to mention that this marks the nineteenth consecutive monthly decline in automobile financing. The total decline since the past 19 months stands at Rs114.29bn.

This decrease is mainly attributed to higher interest rates, an increase in car prices, regulative curbs for acquiring loans, and higher taxes on the import of automobiles and their parts.

Going by the SBP data, consumer financing for house building stood at Rs207.62bn by the end of January 2024, down by 3.44% YoY as against Rs215bn in the same month of last year.

Month-wise, the financing for house building has inched down by 0.26% Mom compared to Rs208.15bn reported in the previous month.

Meanwhile, financing for personal use clocked in at Rs243.1bn, down by 4.47% YoY and 0.54% MoM.

Thereby, the overall credit disbursed to consumers declined to Rs813.96bn during the review month, registering a fall of 9.04% YoY and 0.52% MoM.

The outstanding credit to the private sector inched down by 0.76% YoY to Rs8.35tr in January 2024.

While it witnessed a decline of 2.21% MoM compared to the credit of Rs8.54tr in December 2023.

Under the credit to the private sector, the loans to the manufacturing sector clocked in at Rs4.81tr in the review period, up slightly by 0.33% YoY.

However, comparison on a monthly basis reflects a decline of 0.89% MoM, as in December the loans to this sector stood at Rs4.85tr.

The borrowing from the construction sector stood at Rs190.15bn in January 2024, down by 0.97% YoY and 5.05% MoM compared to the previous month.

Going forward, the data further shows that loans to the agriculture, forestry, and fishing sectors rose to Rs397.27bn in the month under review, up significantly by 16.95% YoY, while on a sequential basis, the loans to the same sector recorded a fall of 4.82% MoM.

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Posted on: 2024-02-20T17:12:00+05:00