Bank lending to the private sector jumped by 19.2 percent year-on-year to Rs7.46 trillion in January suggesting booming economic activities.

However, the biggest growth was noted in the housing and construction sector advances, which surged by 72.3pc in 12 months.

The government has been striving to boost economic growth by promoting the housing and construction sector as it has the ability to activate the allied 40 industries.

Despite the 72.3pc increase in the house building credit off-take, the amount is not significantly high as the sector requires huge funding to bring change for the economy.

It was also noted that despite efforts to accelerate the housing and construction sector, the government has failed to control prices of the building materials which have risen sharply in the 12-month period.

The price of steel bar and cement went up by over 100pc and 70pc, respectively, in a year. The high cost of construction has discouraged the construction activities contrary to the expectations of the economic managers sitting in Islamabad.

The State Bank of Pakistan (SBP) data showed that consumer financing increased by 30pc to Rs821bn in January as compared to Rs632bn in January 2021.

The higher consumer financing shows that consumption, which is the backbone of the economy, is still intact despite rising inflationary pressure.

However, some experts believe that the higher consumer loans could be a direct impact of very high inflation that increases the cost of goods and services during a year. The general inflation in January 2021 was 5.7pc which surged to 13pc in January clearly indicating the impact on consumer loans.

Loans to the transport sector increased by 34.3pc during the period indicating the higher growth in this sector.

The high growth was noted in the car sales which jumped by 61.5pc during the first seven months of FY22.

According to the latest data of the Pakistan Automotive Manufacturers Association, a total of 131,759 cars were sold during 7MFY22. Dealers said the demand is still high.

The credit cards business also showed a growth of 25.9pc during the last 12 months from January 2021 to January 2022. The credit cards loans increased by Rs14bn to Rs65bn during the period.

The higher bank advances to the private sector have made the government optimistic about achieving a growth rate of up to 5pc.

LEAVE A REPLY

Please enter your comment!
Please enter your name here