Find Out Which Cities in Pakistan Have the Lowest and Highest Inflation

Islamabad remains one of most the expensive cities of Pakistan with an inflation rate recorded at 5.0 percent, the highest in Pakistan. On the other hand, inflation in Karachi remains the lowest at 2.1 percent as of June 2017.

Inflation is the rate at which the general level of prices for goods and services is raised. It is measured for ten big cities of the country usually, especially for the federal and provincial capitals.

There are 53 essential items measured to determine inflation level, besides expenses such as transportation and housing.

According to Inflation Monitor by State Bank of Pakistan (SBP), CPI Inflation on year-on-year basis in federal and provincial capitals of Pakistan showed a mixed trend during June 2017.

Inflation in Other Capitals

Among the provincial capitals, the city of Lahore witnessed the second highest percentage of inflation at 4.9 percent, followed by Peshawar at 3.9 percent and Quetta at 2.7 percent.

It is ironic to think that Karachi, being the economic hub of the country with a dense population, reported the lowest rate of inflation. Inflation in Karachi is less than half of the inflation of Islamabad where price-hikes can be controlled much easily due to its geographical size.

​It should be noted that inflation is higher in capitals of different countries.​

​Karachi is also ranked as the fourth cheapest city in the world.​

Different Situation in May

In May 2017, Lahore observed the highest inflation rate of 5.5 percent. Islamabad was a close second with 5.0 percent and Karachi with 4.4 percent. The inflation rate in Peshawar and Quetta was much lower at 3.7 percent and 3.2 percent respectively.

In the coming months, inflation will remain range bound. However this largely depends on the provincial and local governments and their policies.

SBP is projecting average CPI inflation in the range of 4.5 – 5.5 percent for the starting financial year 2017-18. This projection is explained by lower than anticipated increase in international oil prices, recent behavior of CPI inflation in June 2017, stable administered prices and lower inflationary expectations.


  • Pehly Line Main He Bat Khatam :
    Islamabad Main Bohat Kum Hai Karachi Main Bohat Zaida :

  • Xahid

    After giving a birds eye view at 53 essential items list, I don’t think you should call Karachi being cheapest city for living, those items change their prices on regular basis, some time they are equally expensive as in Islamabad. and most of the time the difference is not that huge.

    • Bilal Qureshi

      No offense dear Sir, but I think I do not agree with your point – I am Karachi born citizen but have lived long in Lahore and Islamabad, for those 53 essential items I think Karachi does provide lowest prices, may be not for all but for most of the items, lifestyle of average person in Karachi is lot more cheaper than in Lahore and Islamabad (both the big cities have unnecessary materialistic thinking when comparing them with Karachi).

      Just a thought I shared ! :)

      • Rafay

        I think one of the most important item is missing from the list and that is “Water” for daily routine consumption. People living in Karachi have to spare extra money for water bowser; which is a huge expense. Cost of normal water bowser is way too high if we compare it with other cities.

      • Xahid

        You have right to disagree, maybe, I didn’t spend much time in Islamabad.

  • Abdul Mannan Nasir

    Karachi have his own industry.. due to port it doesn’t have to bear other expensive trafficking costs. Islamabad on the other hand reply on things being transported from other cities. And obviously capital factor also adds up so things are expensive here..