M2 surges 7%, NFA rebounds, private sector credit decelerates: Economic Survey FY24

June 11, 2024 (MLN): Broad Money (M2) grew by 7.0% YoY during July-March FY2024, compared to a 4.4% growth of Rs1,211.5bn in the same period last year while the Net Foreign Assets (NFA) of the banking system expanded by Rs529.7bn contrasting with a decline of Rs2,073bn last year, as Pakistan Economic Survey of FY24 reported today. 

Net Domestic Assets (NDA) increased by Rs1,686.5bn compared to Rs3,284.5bn last year. Private sector credit decelerated to Rs188bn from an expansion of Rs300bn last year.

Loans for consumer financing saw a net retirement of Rs52.6bn, contrasting with a retirement of Rs21.1bn last year. Currency in Circulation decreased by Rs498bn compared to an increase of Rs699bn last year.

Bank Deposits mobilization remained steady at Rs2,70bn, compared to Rs512bn last year.

In July-March FY2024, central banks globally adopted a tight monetary policy stance by increasing interest rates in response to historic high inflation.

However, signals from the market suggest well-anchored inflation expectations amidst investor confidence.

It is anticipated that central banks will gradually transition to a more neutral policy stance globally to achieve target inflation rates and maintain stable inflation expectations.

The State Bank of Pakistan (SBP) maintained its policy rate at 22% in seven consecutive monetary policy decisions throughout July-April FY2024.

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