Annual deflation in Bahrain eased to 0.2 percent in August, the smallest price drop in six months. Prices jumped 1.3 percent from the previous month helped by a rise in food costs, data from the Central Informatics Organisation showed on Tuesday .  

Analysts have expected prices in the Gulf Arab oil producing kingdom to rise this year partially due to higher food prices, however, social unrest sent rents into a nosedive in March.

The non-Opec economy is seen growing by 2.7 percent in 2011, lower than previously expected due to the revolt, after 4.5 percent in 2010 .

Paul Gamble, head of research, Jadwa Investment, Riyadh, said: "The monthly jump is because of Ramadan. It is the same trend we have seen across the region."     

"It (CPI) is still going to be pretty subdued. Domestically we do not really have any pressures on accommodation. The external pressures are easing, global food prices are coming down, the dollar has strengthened a bit recently, so I do not really see much of inflation over the next three months." - Reuters