The annual inflation rate fell to 2.5 percent in May, the lowest since March last year.

The lower inflation outrun was underpinned by declines in the food and non-alcoholic beverages category and also reflected the fall in prices for fresh fruit and vegetables from high levels prevalent immediately after TC Winston.

Barring any major changes in the national budget, the year-end inflation forecast remains at three percent.

Reserve Bank acting governor, Ariff Ali, says the economy is on target to achieve a broad-based growth forecast of 3.8 percent this year.