KARACHI: Headline inflation, measured by the Consumer Price Index (CPI), averaged 4.1 per cent in July-April against 2.8pc a year earlier.

The food group with 37.47pc weight in the CPI basket rose 3.86pc. Higher non-food prices mainly emanated from the education index, which increased 10.53pc compared to 8.72pc last year. Inflation for clothing and footwear remained 4.17pc, housing, water, electricity, gas and other fuel 4.88pc, furnishing and household equipment 3.10pc, health 9.87pc, transport -1.69pc, and recreation and culture 1.27pc in July-April.

Food products, beverages and toba­cco recorded 3.16pc inflation against 0.97pc in the same period last year.

According to Economic Survey 2016-17, the target for current year is 6pc, but the present trend suggests it will remain below the target. The uptick in inflation is due to a global revival of international commodity and oil prices along with a rise in domestic demand.

In July-April, oil prices increased 17.5pc. In fact, a limited pass-through of the rise in global oil prices to domestic petroleum prices during the period transmitted into other prices in the CPI.

The survey said global commodity and oil prices are expected to continue rise, which will affect domestic inflation. However, given the increase in agriculture production, sufficient food supplies, stable exchange rate and effective monetary policy, inflation is expected to remain below the target.

Core inflation is measured by excluding volatile food and energy prices. The gradual build-up of domestic demand is evident in rising core inflation to 5.5pc in April. On average, it remained 5.1pc in July-April compared to 4.1pc a year ago.

The survey said international prices of palm oil and soya bean oil increased 5.1pc and 0.3pc, respectively, since July 2016. The prices of sugar has fallen 16.3pc since July 2016. However, the prices of crude oil, wheat, tea and diammonium phosphate increased 17.5pc, 9.6pc, 14.3pc and 7.3pc, respectively.

Published in Dawn, May 26th, 2017