In October 2023, automobile financing in Pakistan dropped to Rs264.03 billion, marking a YoY decrease of 23.51% and a MoM decrease of 3.03% compared to Rs345.19 billion in October 2022 and Rs272.29 billion in September 2023, respectively, according to the latest data released by the central bank. This decline in automobile financing has persisted for sixteen consecutive months.
Several factors contribute to this decline, including higher interest rates, an uptick in car prices, regulatory restrictions on obtaining loans, and increased taxes on the import of automobiles and their components.
The State Bank of Pakistan’s data reveals that consumer financing for house building reached Rs206.93 billion by the end of October 2023, experiencing a slight MoM decrease of 0.65%. On a YoY basis, house building financing declined by 2.67%.
Financing for personal use amounted to Rs246.19 billion, witnessing a YoY decrease of 4.01% and a MoM decrease of 0.92%. Consequently, the overall credit disbursed to consumers in the review month decreased to Rs829.16 billion, registering an 8.01% YoY decline and a 1.21% MoM decline.
The outstanding credit to the private sector declined by 0.78% YoY, reaching Rs8.1 trillion in October 2023, though it increased by 0.99% compared to the credit of Rs8.02 trillion in September 2023.
Breaking down the credit to the private sector, loans to the manufacturing sector amounted to Rs4.51 trillion in the review period, experiencing a 1.45% YoY decrease and a 1.89% MoM increase. Borrowing from the construction sector stood at Rs194.64 billion in October 2023, reflecting a 0.61% MoM increase and a 0.06% YoY increase.
Looking ahead, data indicates that loans to the agriculture, forestry, and fishing sectors increased to Rs383.51 billion in the month under review, marking a 15.76% YoY increase, with a sequential increase of 2.34% MoM.
