Larkana maintains highest inflation rate

RIZWAN BHATTI

KARACHI: Larkana, the city of the ruling party, continued to observe highest inflation and, for the second consecutive month, it appeared to be the most expensive city of the country.

According to State Bank of Pakistan's inflation monitor, among 40 largest cities of Pakistan highest inflation was observed in Larkana during December 2011.

Larkana city observed 16 percent inflation in December 2011 compared with 15.3 percent in November 2011. Analysis showed that both components of inflation, comprising food and non-food, witnessed increase, as food inflation surged to 14.5 percent from 13.8 percent and non-food inflation 16.4 percent in November 2011 to 17 percent in December 2011.

According to SBP, the Consumer Price Index (CPI) inflation on year-on-year basis in federal and provincial capitals of Pakistan was lower than overall inflation observed during December 2011. Among five largest cities, the highest inflation was observed in Karachi which was 9.1 percent, while the lowest inflation was observed in Quetta which was 7.8 percent, during the period under review.

Among federal and provincial capitals, the inflation in Islamabad, Lahore and Peshawar was 8.3 percent, 8.3 percent and 7.9 percent respectively during December 2011. In Karachi, food inflation was higher than non-food inflation, and food inflation stood at 9.8 percent, while food inflation stood at 8.6 percent.

The State Bank said that Sialkot was the cheapest city of the country, where the CPI inflation stood at 5.9 percent with 5.1 percent of food inflation and 6.4 percent of non-food inflation.

Dera Murad Jamali came up with second highest inflation of 12.3 percent with 13.2 percent food and 11.7 percent non-food during December 2011. Bahawalpur was on third number with 12.1 percent CPI inflation.

Nawabshah, Sahiwal, Bahawalnagar, and Mithi observed 12 percent, 11.5 percent, 11.3 percent and 11.2 percent CPI inflation during last month with fourth, fifth, sixth and seventh positions.

Headline CPI inflation on base (2007-08 = 100) was recorded at 9.7 percent on year-on-year basis in December 2011 as compared to 10.2 percent in the previous month and 15.5 percent in the corresponding month of last year, the SBP said.

CPI inflation on month-on-month basis decreased to -0.7 percent in December 2011 as compared to 0.3 percent in the previous month and -0.3 percent in the corresponding month of last year. Seasonally adjusted month-on-month CPI inflation came to 0.5 percent in December 2011 as compared to 0.7 percent in previous month.

Core inflation (trimmed) on year-on-year basis decreased to 10.6 percent in December 2011 as compared to 11.5 percent in the previous month and 13.4 percent in the corresponding month of last year.

On month-on-month basis, the core inflation (trimmed) was 0.3 percent in December 2011 as compared to 0.5 percent in November 2011 and 0.8 percent in December 2010.

Non-food, non-energy inflation measured by CPI core (NFNE) on year-on year basis was recorded at 10.2 percent in December 2011 as compared to 10.4 percent a month earlier and 9.8 percent in December 2010.

Core NFNE inflation on month-on-month basis decreased to 0.5 percent in December 2011 as compared to 0.6 percent a month earlier. Core NFNE was 0.7 percent in December 2010. WPI inflation on year-on-year basis decreased to 8.3 percent in December 2011 when compared to 12.0 percent a month earlier. During December 2010, WPI inflation was recorded at 22.5 percent.