Karachi August 23 2022: Consumer Financing declined for the first time in the last 26 months during the month of July 2022 to fall below PKR 900 billion, as per the latest data released by the State Bank of Pakistan.
This is the first time since May 2020 that consumer financing post negative growth as the State Bank of Pakistan raised the policy rate by 800 basis points in September 2021 to cool the economic activity in order to curtail the current account deficit.
Consumer financing decreases by PKR 6.8 billion or 0.8 percent on a month-on-month basis to PKR 893 billion as of July 2022.
Financing for house building purposes witnessed the largest jump as it increases by a whopping 70 percent or PKR 58 billion on a year-on-year basis to reach PKR 144 billion in 2021.
Auto financing showed a major decline of PKR 7.3 billion or 1.9 percent during the month of July 2022 as it falls to PKR 361 billion, the highest drop for any month in its history. The previous highest decline was of PKR 5.0 billion registered in October 2008. In 2008, Auto financing recorded negative growth for a period of consecutive seventeen months.
Loans disbursed under the personal financing head also declined by PKR 961 million or 0.4 percent in July 2022 to PKR 250 billion.
Loans for consumer durable declined the most by more than 5 percent or PKR 381 million to PKR 6.9 billion at the end of July 2022. This is the third monthly decline in bank advances against consumer durable.
However, Loan facility disbursement through Credit Card increased by 1.5 percent or PKR 1.1 billion on the month on monthly basis to at PKR 73.9 billion at the end of July 2022.