Georgia's inflation rate in August was 0.4 percent, down by 0.5 percent from July, the country's central statistical office GeoStat said on Tuesday.

The drop was attributed to decreased food and clothing prices. Food prices dropped by 2.8 percent while prices for clothes and footwear dropped by 7.6 percent, Geostat reported.

After having experienced a 10-year-high inflation rate of 14.3 percent in May of last year, Georgia ended 2011 with an annual inflation rate of 2.0 percent.

Georgia's inflation slid into deflation for the first time in 30 months in February this year when the rate was minus 2.1 percent. The March annual inflation was minus 2.2 percent. In April it was -2.1 percent while the months of May and June witnessed negative annual inflation rates of -3.3 percent and -0.2 percent respectively.

Thanks to the low inflation, the central bank of Georgia has kept unchanged its main policy rate at 5.75 percent. The National Bank of Georgia last cut its main policy rate by 0.25 percentage points in June this year.

Xinhua