Major decline in bank borrowing amid rising inflation in Pakistan
Pakistan has seen a significant drop in bank borrowing due to rising
inflation and diminished purchasing power, with notable declines in loans for
vehicles, homes, and personal expenses.
Recent data from the State Bank of Pakistan (SBP) reveals a sharp reduction
in borrowing trends. In July 2024, loans for vehicle purchases totaled Rs228
billion, representing a 20% decrease from Rs285 billion in July 2023. This
decline highlights the financial strain on consumers as inflation pressures
mount.
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borrows record amount of Rs 8.56 trillion from banks in FY24
Similarly, borrowing for housing decreased to Rs203 billion in July 2024,
down 4% from the previous year. Overall consumer financing, which encompasses
various personal loans, fell by 6% year-over-year, totaling Rs802 billion in
July 2024.
Despite the overall decrease in major borrowing categories, there was a
notable 28% increase in credit card usage. In July 2024, Rs125 billion in loans
were taken out via credit cards, indicating a shift towards short-term
borrowing solutions.
The reduction in bank loans for significant purchases underscores the
economic challenges faced by the public, driven by rising costs and reduced
purchasing power.
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reduces borrowing from banks significantly
In contrast, Pakistan’s foreign exchange reserves experienced a significant
boost of $173 million in the past week. The total reserves now stand at $14.645
billion, with the central bank's foreign currency reserves rising by $12
million to $9.273 billion, and commercial banks’ foreign currency deposits
increasing by $5.3 million to $5.373 billion.
Source: Samaa TV