Private sector credit in Pakistan demonstrated a strong year-on-year (YoY) growth of 15.4% in August 2025, reaching Rs 9.744 trillion, up from Rs 8.441 trillion in August 2024, despite a 1.7% month-on-month (MoM) decline, according to the State Bank of Pakistan (SBP).
This growth, amounting to an increase of Rs 1.303 trillion, was primarily driven by improving economic activity, easing financial conditions, and continued reductions in government borrowing.Â
However, when compared to the previous month, private sector credit declined by 1.7%, with a Rs 173 billion drop from Rs 9.917 trillion in June 2025 to Rs 9.744 trillion in August.
The private sector credit growth was seen across various segments, including working capital loans, fixed investment advances, and consumer financing. The key borrowing sectors contributing to this growth were textiles, telecommunications, and wholesale and retail trade.
SBP data further revealed that private sector investment in securities and shares surged by 31% year-on-year, reaching Rs 260 billion in August 2025, compared to Rs 198 billion in August 2024.Â
Moreover, loans to the private sector increased by Rs 1.24 trillion, rising to Rs 9.484 trillion in August 2025, up from Rs 8.243 trillion in the same month last year.
SBP remains optimistic about the demand for private sector credit, anticipating continued momentum despite potential risks posed by a post-flood slowdown in economic activity.
The reduction in the government’s net budgetary borrowing, especially following a Rs 2.4 trillion transfer from the SBP to the national exchequer, has provided more fiscal space for the private sector, thus enabling higher credit expansion from banks to the non-government sector.
