Mianwali has been declared the most expensive city of the country as highest Consumer Price Index (CPI) inflation was registered there in October. According to the State Bank of Pakistan''s (SBP) inflation monitor, among 40 leading cities of the country, some 18 cities are ranked in highest inflation cities, while the remaining 22 categories in low inflation towns in October 2016.
During the period under review, Mianwali has become the most expensive city of the country as it observed 10.5 percent general inflation year-on-year basis, comprising 10.8 percent food and 10.3 percent non-food inflation. The lowest CPI inflation was registered in Mithi with 1.3 percent general inflation, 0.5 percent food and 1.7 percent non-food.
The CPI Inflation on year-on-year basis in federal and provincial capitals of Pakistan remained lower than overall inflation during October 2016 except Islamabad. Among these five cities, the lowest inflation was observed in Peshawar at 1.6 percent while the highest inflation was observed in Islamabad at 4.4 percent.
The CPI inflation in Karachi and Lahore was 3 percent and 2.4 percent, respectively during the period under review. In addition, capital of Balochistan-Quetta witnessed 3.3 percent inflation. The inflation monitor revealed that Abbottabad is the second highest inflation city with 10.3 percent CPI inflation in October 2016 and with 7.4 percent inflation, Faisalabad stands on third.
The SBP, in its recently issued report, has already said uncertainty in global oil prices is adding risks to the inflation outlook and the continued uncertainty is still remains a concern. Based on macroeconomic fundamentals and global commodity outlook, the SBP expects inflation to be in the range of 4.5-5.5 percent in FY17, against the target of 6.0 percent set by the government.
The SBP said that a roller-coaster trend in oil prices taking its toll on the robustness of inflation forecasts; it has also blurred the external sector outlook. Global oil prices that recovered steadily post mid-February 2016 on the back of market balancing, declined again after the Brexit vote in end-June 2016. Assuming higher international oil prices for FY17 (ie, US $48/bbl, compared to US $42/bbl in FY16), the expected increase in inflation during the year would stem primarily from the normalisation of fuel inflation in the country, it added.