ISLAMABAD: Inflation increased to 4.17 per cent in April from 3.94pc in the preceding month, mainly on the back of hike in pulse and gas prices.

On a month-on-month basis, prices rose 1.55pc in April, the Pakistan Bureau of Statistics said on Monday.

The annual inflation is measured through the Consumer Price Index (CPI), which tracks prices of 481 commodities. Average inflation for the July-April 2015-16 period now stands at 2.79pc compared to 4.81pc a year earlier.

Core inflation, measured by excluding volatile food and energy prices, was recorded at 4.4pc in April 2016, slightly lower than 4.7pc in the previous month. Falling inflation has also encouraged the State Bank of Pakistan to maintain its key interest rate at a 42-year low of 6.5pc.

Core inflation has remained subdued since November last year because of a tighter monetary policy and reduction in food and fuel prices.

In April, food inflation rose 2.4pc on a month-on-month basis. The price of non-perishable items dipped by 1.06pc during the month, while that of perishable food items rose 12.28pc.

Additional upward pressure came from a hike in prices of clothes and footwear, housing, water, electricity, gas and fuel, health, transport and furnishing equipment.

The food items whose prices increased included tomatoes (60.41pc), chicken (30.75pc), fresh vegetables (14.32pc), gram whole (5.71pc), pulse mash washed (3.65pc), pulse gram (3.58pc) and besan (2.95pc).

Non-food inflation increased by 1pc in April 2016 compared to the previous month. The items or services whose prices rose were: education (4.97pc), medical equipment (2.34pc), cotton cloth (2.11pc), doctor (MBBS) clinic fee (2.05pc), sewing needle (1.56pc), kerosene (1.4pc), motor fuel (1.33pc) and house rent (1.22pc).

Average inflation measured through the Sensitive Price Index (SPI) was negative 1.44pc in July-April 2015-16, while Wholesale Price Index (WPI) was negative 1.29pc.

Lower WPI reflects less demand for domestic commodities, mainly because of low purchasing power. The entrance of manufacturing sector into a negative growth indicates deflation in economy.

Published in Dawn, May 3rd , 2016