Georgia's central bank cut its refinancing rate by another 25 basis points to 4.0 percent, its fourth rate cut this year, as inflation remains below the bank's 6.0 percent target and is first expected to fall to that level by the end of next year.
The National Bank of Georgia (NBG) started cutting its rates in July 2011 and has now cut rates by 125 basis points in 2013 after cutting by 150 basis points in 2012.
In May the NBG reduced its inflation forecast for the next 18 months and said it expected the headline rate to approach its target by the end of 2014, a slightly less optimistic forecast than in March when it said it expected inflation to hit the target in the second half of next year.
Georgia's bout with deflation continued in May, with consumer prices falling by 0.11 percent. In the last 16 months, Georgia has only seen prices rise during two months.
In the first quarter of this year, Georgia's Gross Domestic Product rose by an annual 1.9 percent, up from 2.5 percent in the fourth quarter.