Pakistan’s car market continues to remain in low gear with auto-financing extending its descent during the month of August.
It witnessed a 21.1 percent year-on-year drop as compared to Rs. 353 billion in August 2022, data released by the State Bank of Pakistan (SBP) showed on Monday. According to Arif Habib Limited, auto financing declined consecutively for the 14th month (total decline: Rs. 89.8 billion) with the August 2023 figure down 2.5 percent month-on-month (Rs. 7.1 billion) to Rs. 278 billion.
During the period in review, astonishing interest rate hikes, skyrocketing automobile prices, frequent plant shutdowns, delays in vehicle delivery, fortnightly petrol bombs, and different central bank initiatives have all contributed to the slump.
Meanwhile, consumer financing for house construction hit Rs. 209 billion by the end of August 2023, a 1.7 percent YoY increase, owing mostly to SBP policies to boost the property sector in the country.
On a monthly basis, however, finance for house building declined by 0.8 percent MoM.
Personal loans on credit cards surged by 33.3 percent YoY to Rs. 103 billion in August. Loans under this category showed a slight increase of 5.2 percent MoM from Rs. 98 billion recorded last month.
Overall credit issued to end-users (consumer financing) increased to Rs. 845.53 billion in August, a 5.4 percent YoY and 0.7 percent MoM decrease.
During the review month, outstanding credit to the private sector declined by 1.3 percent YoY to Rs. 8.14 trillion. Loans to the private sector declined by 1.1 percent YoY and 0.5 percent MoM to Rs. 7.96 trillion.
Loans to the manufacturing sector totaled Rs. 4.40 trillion, down 1.8 percent YoY from the same period last year.