KARACHI: Inflation in Lahore is continuously outpacing other major cities in Pakistan, according to the inflation monitor data of the State Bank of Pakistan (SBP).

Inflation reading for December 2017 in Lahore touched 6.6 per cent compared with just 1.8 per cent in December 2016.

Experts say it is difficult to determine the precise reason of higher inflation in a particular city, but it seems that low cross-border trade with India may have impacted the prices of agriculture products in the city, making them more expensive.

It is not just about the rate of inflation in December; Pakistan’s second largest city has been showing a higher inflation trend for the last many months.

Owing to this trend, the cost of living in Lahore is also increasing, IBA Karachi Assistant Professor and Research Fellow (CBER) Dr Aadil Nakhoda commented. “This might be an indicator of rising food prices due to low trade with India.” Meanwhile, Islamabad came at number two position with a Consumer Price Index (CPI) of 5.6 per cent in December 2017 compared with 4.1 per cent in the same month of 2016.

Karachi witnessed lowest inflation among the top five major cities and stood at 3.1 per cent in December 2017 compared with 2.6 per cent in the same month of 2016.

“It is difficult to analyse inflation trend at such a micro level, but I think higher rate of inflation in Lahore means that some people must be charging higher prices from consumers than they should,” said NUST Islamabad School of Social Sciences and Humanities Principal and Dean Dr Ashfaque Hasan Khan.

Inflation

Unlike 2017, Karachi showed a higher inflation trend in 2016 compared to any other major city in the country.

During the last two to three years, Karachi has shown much faster economic growth compared with other major cities, which also translated into higher inflation rate in the city.

For instance, the industrial capital of Pakistan in 2016 led all other cities with an average 5.1 per cent inflation in the first half (January to June) of 2016.

However, the trend changed in 2017 as the largest city of Pakistan displayed lower numbers among larger cities. Interestingly, when Karachi was showing higher inflation in 2016, Lahore had the lowest inflation numbers among major cities at below 2 per cent.

With rising oil prices and over 5 per cent rupee depreciation against the dollar recently, analysts expect higher inflation in coming months. A rising trend is already seen in inflation.

In December 2017, the headline CPI inflation was recorded at 4.6 per cent highest in last seven months compared with 3.7 per cent in the same month of 2016. Meanwhile, inflation in November 2017 stood at 4 per cent. -Internews Absence of banking channels to hinder Pak-Iran trade LAHORE, January 26 (Internews): Trade Development Authority of Pakistan (TDAP) Secretary Inamullah Dharejo has said that bilateral trade with Iran is unlikely to see a surge in volume as no Pakistani bank is ready to open its branch in the country due to international sanctions on Tehran.

“The State Bank of Pakistan (SBP) is also involved in this matter, but to date there has been no major breakthrough to increase trade volume,” Dharejo said on Friday, while talking to media on the sidelines of a consultative session on the Strategic Trade Policy Framework (2018-2023).

He said the only option is barter trade, but its scope would be limited due to non-presence of banking channels.

“Afghanistan, on the other hand, is a big trading partner and a key country for Pakistan for regional connectivity. Unfortunately, political tension between the two countries is the biggest impediment in implementing trade policy.”

Internews