Inflation was pushed lower by VAT cuts on internet service, catering and fish that took effect on Jan. 1. Excluding the impact of tax changes, consumer prices rose by an annual 2.4 percent and 0.8 percent from the previous month.

Food prices rose by 4.4 percent year on year and the price of tobacco and spirits jumped by 6.5 percent. Household energy prices increased by 1.6 percent and the price of goods in the category that includes vehicle fuel edged down 0.1 percent.

Core inflation, which excludes volatile fuel and food prices, was an annual 2.5 percent.

The NBH noted that prices of market services fell slightly in January from the previous month, because of the VAT rate reductions for internet and restaurant service.

Excluding the tax changes, these prices rose 0.4 percent, which is broadly consistent with the change in prices last year, it said.

Household inflation expectations “remained at moderate levels” during the month, the central bank added.