Car Financing Sees 14 Months of Continuous Decline

Jawad

19 Sep 2023

286

Car Financing Sees 14 Months of Continuous Decline

Pakistan (SBP), it witnessed a significant year-on-year drop of 21.1 percent compared to August 2022 when it stood at Rs. 353 billion. Arif Habib Limited reports that auto financing has now declined for the 14th consecutive month, totaling a decline of Rs. 89.8 billion. In August 2023, the figure plummeted by 2.5 percent month-on-month, reaching Rs. 278 billion.

Several factors have contributed to this protracted slump in auto financing, including sharp interest rate hikes, surging automobile prices, frequent plant shutdowns, delivery delays, volatile fuel prices, and various initiatives from the central bank.

In contrast, consumer financing for house construction saw an increase, reaching Rs. 209 billion by the end of August 2023, marking a 1.7 percent year-on-year growth. This growth can be attributed largely to SBP policies aimed at stimulating the property sector in the country. However, on a monthly basis, financing for house construction declined by 0.8 percent.

Personal loans on credit cards experienced a substantial year-on-year surge of 33.3 percent, reaching Rs. 103 billion in August. Loans in this category showed a modest 5.2 percent month-on-month increase from Rs. 98 billion recorded the previous month.

The overall credit issued to end-users, encompassing consumer financing, decreased to Rs. 845.53 billion in August, reflecting a 5.4 percent year-on-year decline and a 0.7 percent month-on-month decrease.

During the review month, outstanding credit to the private sector also declined by 1.3 percent year-on-year, totaling Rs. 8.14 trillion. Loans to the private sector decreased by 1.1 percent year-on-year and 0.5 percent month-on-month, reaching Rs. 7.96 trillion.

Loans to the manufacturing sector amounted to Rs. 4.40 trillion, marking a 1.8 percent year-on-year decline from the same period last year.

Car Financing Decline Auto Financing in Pakistan State Bank of Pakistan Data Pakistan Automotive Market Interest Rate Hikes Impact Automobile Price Increase Consumer Financing Trends Property Sector Growth Credit Card Loans Manufacturing Sector Loans

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