UPDATE 1-Mexico growth picking up, inflation behaving - Carstens
(Adds central banker comments)
MEXICO CITY, April 3 (Reuters) - Mexico's economy is pulling out of a soft patch while inflation will head back towards 3 percent over the next 18 months, Central Bank Governor Agustin Carstens said on Thursday.
Carstens said inflation was "pretty well behaved" after the pace of annual consumer price gains fell back below the bank's 4 percent ceiling in early March, shaking off the impact of new taxes without any wider pressures.
The central bank kept its benchmark interest rate on hold at 3.50 percent last month and analysts expect policymakers will maintain steady borrowing costs this year as the economy recovers from a weak start to 2014.
"We see that there are already certain indications that a much more vigorous economic recovery is underway," Carstens said in a senate hearing, adding that he saw a "big" recovery in the construction sector, which had contracted sharply last year.
Consumer confidence in March rose to a four-month high, a separate report showed on Thursday.
Analysts cut their estimates for growth this year to 3.09 percent, a poll from the central bank showed on Thursday, dropping their outlook for the third month in a row.
Carstens said a series of economic reforms, including a landmark opening of the state-run energy sector, should lift growth to around 5 percent in a few years. (Reporting by Luis Rojas; Editing by James Dalgleish)
© Thomson Reuters 2017 All rights reserved.