FX.co ★ Bahrain Inflation Highest in Over 3 Years

Bahrain’s annual inflation rate accelerated to 3.0% in July 2026, up from 2.3% in each of the previous two months, reaching its highest level since December 2022.

The increase was driven primarily by faster price growth for food and non-alcoholic beverages (7.1% vs 5.8% in June), as well as a rebound in prices for recreation and culture (8.6% vs -0.6%) and for restaurants and hotels (1.5% vs -0.3%). At the same time, deflation eased in several categories, including clothing and footwear (-8.9% vs -12.6%), housing and utilities (-1.3% vs -2.2%), and health (-0.1% vs -0.2%).

By contrast, inflation in transport remained high but slowed to 9.1% from 10.6%, and price growth in miscellaneous goods and services also moderated (2.4% vs 3.3%). Further price declines were recorded for alcoholic beverages and tobacco (-1.9% vs -0.6%), furnishings, household equipment, and routine household maintenance (-1.5% vs -1.2%), and communication (-0.5% vs -0.3%). Education prices were unchanged, with inflation steady at 2.8%.

On a monthly basis, consumer prices rose 0.3% in July, following a 0.9% increase in June.