Bahrain's annual inflation eased in January to its lowest level since at least 2007 and prices edged up from the previous month helped by higher transport costs, data showed.

Inflation in Bahrain has been holding in low single digits over the past year as its key financial sector is slowly picking up from the financial crisis and a regional property crash, said a report in our sister publication, the Gulf Daily News.

Consumer price growth slowed to 0.6 per cent year-on-year in January from 1 per cent in the previous month, Central Informatics Organisation data showed.

On a monthly basis, living costs in the kingdom rose 0.3 per cent after a 0.2 per cent increase in December.

'The figures for Bahrain are quite low. Even during the boom years, inflation never really took off in Bahrain the way it did in other countries in the Gulf,' said National Bank of Kuwait senior economist Daniel Kaye.

Food costs dropped sharply on a monthly basis, falling by 2 per cent in January, while transport prices jumped 1.4 per cent.

Housing costs remained unchanged.

Analysts polled by Reuters expected inflation to reach 3 per cent this year, after 2 per cent in 2010. – TradeArabia News Service