Highest inflation in Mianwali at 18.2pc: lowest in Quetta 10.6pc

KARACHI - The cities of Lahore and Peshawar witnessed higher rate of inflation in January 2010 while it was lower in Karachi compared to the national average inflation pace during the same month, The Nation deduced it from the SBP inflation monitor on Saturday.
A document released by SBP on city-wise inflation indices showed that inflation (YoY) in the five major cities of the country was slighter than the overall YoY inflation during January 2010. Detailed analysis of 35 cities showed that 19 cities recorded higher inflation than the overall inflation (YoY), while 16 cities registered lower than average inflation during January 2010.
The highest inflation (YoY) was recorded in Mianwali at 18.2 percent, while Quetta registered the lowest inflation (YoY) of 10.6 percent.
The city-wise data also revealed that food inflation in Mianwali reached at 23.1 percent whereas it was decreased to 7.2 percent in Quetta that was almost descended, compared with the other cites in the country during the month under review. Bahawalnagar registered the highest non-food inflation of 15.0pc, while the lowest non-food inflation of 8.7pc was observed in Islamabad.
SBP comprehended that inflationary pressures strengthened in the economy during January 2010. Headline CPI inflation (YoY) increased by 3.2 percentage points during January 2010 compared with December 2009. The other measures of inflation such as WPI & SPI also accelerated significantly during the reported month of the current fiscal year.
This increase in CPI inflation (YoY) during January 2010 was mainly contributed by a sharp surge in food and energy prices, which is evident in a decline in core inflation measured by excluding food and energy from the CPI basket. In contrast, core inflation, measured by 20 percent trimmed mean, increased by a significant 2.3 percentage points over December 2009.
As per SBP findings, the major reasons for acceleration in domestic inflation during January 2010 were: (a) increase in administrative prices of energy and key fuels by the government; (b) depreciation of rupee amidst transfer of oil payments from SBP to interbank market, as well as, (c) a temporary supply shocks due to bad weather (fog) in Punjab, which created supply shortages of essential food items. Despite the sharp surge in CPI inflation (YoY) during January 2010, it is substantially lower compared with the same month last year. This is also reflected in long run trend in CPI inflation measured by 12-month moving average, that shows a continued decline during January 2010, dropping to 13.1 percent as against 13.6 percent in December 2009, and 21.0pc during January 2009.
Following the overall CPI trend, annualized inflation in CPI food and non-food groups recorded lower inflation during January 2010 compared to both the previous month as well as the same month last year.
Due to significant increase in overall food inflation (YoY), weighted contribution of the food group to overall CPI inflation increased in January 2010 (50.6 percent) compared to both the previous month (47.1 percent) and the same month (46.6 percent) last year. Consequently the weighted contribution of non-food group declined during January 2010 (49.4 percent) compared to both the previous month (52.9 percent) and the same month (53.4 percent) last year. Within non-food group, fuel & lighting (11.5 percent) and house rent index (22.0 percent) subgroups showed acceleration during the review month compared to the January ( 9.7 percent and 20.4 percent respectively). However, house rent weighted from 29.9 percent seen in the previous month.