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Sun 2 Mar 2008 05:36 PM

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Bahrain inflation hits 4.6% on rising food prices

Inflation in January rose 0.6% as food, beverage and tobacco costs climbed 2.1%.

Bahrain inflation hits 4.6% on rising food prices
RISING COSTS: Inflation in Bahrain hit 4.6% in January on rising food prices. (Getty Images)

Inflation in Bahrain, the smallest Gulf Arab economy, rose 0.6% in January from the previous month as food costs climbed, the government's Central Informatics Organisation (CIO) said.

Bahrain's consumer price index was 104.64 points at the end of January compared with 104.07 points in December, the CIO said on its website, without giving a comparative index figure for January 2007.

Food, beverage and tobacco costs climbed 2.1% in January from December while housing costs were steady, the data showed.

The CIO said in January it was using 2006 as its base year, and that calculations of annual inflation for each month would be done at a base of 100 points until it works out new weights to calculate prices for previous years.

That would indicate annual inflation in January of 4.64% compared with 4.07% in December.

Bahrain said in January it had allocated 40 million dinars ($106.2 million) to help citizens cope with a rise in the price of basic goods.

Like most of its neighbours in the world's top oil-exporting region, Bahrain pegs its currency to the dollar, forcing it to track US monetary policy when the Federal Reserve is slashing interest rates to ward of recession.

By contrast, Gulf economies are surging on a five-fold rise in oil prices in the last six years. (Reuters)

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