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MEXICO CITY, June 24 (Reuters) - Mexico’s annual inflation rate in early June ticked up slightly faster than expected, but it was still near a record low, giving policymakers room to hold interest rates low until an expected move higher in U.S. borrowing costs.
Inflation in the 12 months through mid-June ticked up to 2.87 percent, data from the national statistics institute showed on Wednesday, just up off a record low of 2.82 in the second-half of May and compared to expectations of 2.84 percent in a Reuters poll of 15 analysts.
Most of Mexico’s central bankers think inflation will remain below their 3 percent target for the rest of the year amid a sluggish economy.
Despite tame inflation and anemic growth, Mexico is seen raising interest rates when U.S. borrowing costs move higher. Mexico is expected to lift its main rate of 3 percent by 25 basis points in October, according to a Banamex poll on Monday.
Consumer prices rose 0.13 in the first half of June , driven by higher tomato prices. The poll projected a rise of 0.12 percent.
The core price index, which strips out some volatile food and energy prices, climbed 0.13 percent in early June compared with expectations of 0.10 percent.
The 12-month core inflation rate came in at 2.31 percent compared with an estimated 2.28 percent.
Mexico’s peso has slumped since last year, hitting a fresh record low in June, but the central bank says there is no sign that currency weakness has fed into wider price pressures.
Separate data on Wednesday showed economic activity rose in April compared with the prior month at it fastest pace in nearly 2 years. But much of the growth was driven by a surge in agricultural output, while industry dipped.
After last year projecting growth of nearly 4 percent in 2015, analysts have cut back expectations and now see Mexico’s economy growing just over 2.6 percent this year, according to the Banamex poll.
Reporting by Michael O'Boyle Editing by W Simon