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MEXICO CITY, June 9 (Reuters) - Mexico’s annual inflation rate ticked up in May, coming in slightly faster than expected after a surprise move last week by the country’s central bank to cut interest rates to boost a sluggish economy.
Inflation in the 12 months through May was 3.51 percent, the national statistics institute said on Monday, compared with expectations of 3.47 percent in a Reuters poll and just up from a 3.50 percent annual rate in April.
The central bank unexpectedly slashed its main interest rate by 50 basis points to a record low of 3.00 percent on Friday, saying slack in the economy gave it room to lower borrowing costs without fanning inflation.
Annual inflation is expected to rise back above the central bank’s 4 percent limit in the second half of the year, but it is then seen cooling to end the year below 4 percent. Meanwhile, growth is seen picking up after the economy barely grew in the first quarter.
In the month of May alone, consumer prices fell 0.32 percent , due mostly to summer electricity subsidies, compared to an expected drop of 0.36 percent.
Core prices, which strip out some volatile food and energy costs, were up 0.09 percent in May versus expectations of 0.05 percent. (Reporting by Michael O‘Boyle Editing by W Simon)