UPDATE 2-Mexico early June annual inflation rises to 3-month high

martes 24 de junio de 2014 10:05 GYT
 

(Adds economic activity data)

MEXICO CITY, June 24 (Reuters) - Mexican annual inflation rose in early June for the first time in five months but stayed within the central bank's tolerance zone, backing bets for steady interest rates ahead.

Inflation for the 12 months through the first half of June rose to 3.71 percent, data showed on Tuesday, just below expectations for a 3.74 percent rise, and well above a seven-month low of 3.44 percent reached in the first half of May.

It was the fastest pace since early March, and the first early month rise since January, after annual inflation reached 3.51 percent in the full month of May.

The annual pace of consumer price gains had been falling back after a spike above the central bank's 4 percent limit early this year due mostly to new taxes on soft drinks and junk food.

Mexico's central bank unexpectedly slashed interest rates to a record low earlier this month, saying a sluggish economy gave it room for a one-off cut to spur growth without fanning inflation pressures.

Growth sank to a 4-year low of 1.1 percent in 2013.

The central bank, which cut its 2014 growth forecast to between 2.3 and 3.3 percent from a range of 3 to 4 percent, could further lower its estimate after first-quarter growth was weaker than expected.

Consumer prices rose 0.08 percent in the first half of June, compared to forecasts for a 0.12 percent rise, as tomato, gasoline and beer prices rose.   Continuación...