Abbottabad has become the most expensive town while Dadu the cheapest city of the country, the State Bank of Pakistan (SBP) said in its inflation monitor. According to the SBP, among 40 leading cities of the country, Abbottabad has witnessed the highest inflation during the last month of FY16. Abbottabad observed an 8.8 percent general inflation (year-on-year basis) comprising 4.4 percent food and an 11.8 percent non-food inflation in June 2016.
During the period under review, Dadu (Sindh) was the cheapest city as "zero" inflation was registered there. In Dadu, food inflation was minus 1.4 percent and non-food was 0.9 percent in June this year. While, Hyderabad city registered a 0.1 percent inflation.
CPI inflation on year-on-year basis in federal and provincial capitals of Pakistan remained lower than overall inflation during June 2016 except Karachi. Among federal and provincial capitals cities (Karachi, Lahore, Queeta, Peshawar and Islamabad), the lowest inflation was observed in Lahore at 0.8 percent (including minus 1.4 percent food and 2.7 percent non-food) while the highest inflation was observed in Karachi at 4.7 percent (3.2 percent food and 5.7 non-food).
The inflation in Islamabad and Peshawar was 2.5 and 1.2 percent respectively during the period under review. In addition, capital of Balochistan-Quetta witnessed a 2.5 percent inflation comprising 1 percent food and 3.7 percent non-food. Out of 40 leading cities, Turbat was the second highest city hit by inflation as it observed CPI inflation of 6 percent. With 5.5 percent inflation, Faisalabad ranked third in June 2016.
According to SBP''s inflation monitor, headline CPI inflation is recorded at a level of 3.2 percent on year-on-year basis in June 2016 as in the previous and corresponding months of last year. SBP in its recently announced Monetary Policy has forecasted an average CPI inflation in the range of 4.5-5.5 percent for FY17. However, SBP said that any upward adjustments in gas tariff, fiscal slippages, and supply disruptions pose risk to this assessment. Uncertain global oil price is the major risk to this projection.