UPDATE 1-Mexico's Carstens sees rapid decline in inflation next year
(Adds central banker comment, growth forecast)
QUERETARO, Mexico Oct 26 (Reuters) - Mexico's central bank chief Agustin Carstens said on Sunday that he sees inflation heading quickly towards policymakers' target rate of 3 percent next year.
Mexico's annual inflation rate hit a nine-month high of 4.32 percent in early October.
Carstens said that a slower pace of government-controlled gasoline price hikes set to take effect next year, combined with the fading effects of tax hikes from early this year, would help inflation cool "very quickly" in 2015.
"We think with high probability that inflation will be converging toward 3 percent by the middle of next year," Carstens told a gathering of business leaders in Queretaro.
Mexico's central bank is seen holding its benchmark interest rate steady next Friday at 3 percent.
Carstens said he expected Latin America's No. 2 economy to grow between 2.5 percent and 2.7 percent this year, above the midpoint of the central bank's 2.0 percent to 2.8 percent forecast range. Data last week showed Mexico's economy contracted in August. (Reporting by Elinor Comlay and Tomas Sarmiento; Editing by Ryan Woo and Kenneth Maxwell)
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