Bahrain July CPI falls 1.3%

DUBAI - Consumer prices in Bahrain fell 1.3 per cent on an annual basis in July, the least in five months, and rose from the previous month helped by a jump in food costs, data showed on Sunday.

By (Reuters)

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Published: Mon 22 Aug 2011, 10:49 PM

Last updated: Tue 7 Apr 2015, 3:47 AM

The small non-OPEC oil producer entered the deflationary path in March, when it went through its worst social unrest since the 1990s, as rents plunged.

Deflation, unseen in the Gulf financial hub since 2002, reached 2.1 per cent year-on-year in June after living costs rose by two per cent on average last year.

On the month, consumer prices increased by 0.6 percent in July in their biggest spike since March compared with June’s 0.3 per cent fall, data from the Central Informatics Organisation showed.

“Inflation for the month was very much in line with our expectations. We expect to see some monthly improvement going forward,” said Monica Malik, chief economist at EFG-Hermes in Dubai.

Housing costs, which account for nearly a quarter of the basket, remained flat for the fourth month in a row on a monthly basis in July following a 14.2 per cent drop in March.

Food prices, which make up for 16 percent of consumer expenses, soared by 2.3 per cent from the previous month, which was their sharpest rise in five months, the data showed.

“We’ve also seen a pick-up in price growth in Saudi Arabia and Egypt in July, so this may be related to Ramadan and hence be likely to continue through August,” said Liz Martins, senior MENA economist at HSBC in Dubai.



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