(Adds economic activity data)
MEXICO CITY, June 24 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
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
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
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.
The measure had fallen 0.37 percent in early May, due to
summer electricity subsidies and a drop in some fresh food
Core consumer prices, which exclude some
volatile food and energy prices, picked up 0.12 percent, above
expectations for a 0.10 percent rise, and up from the 0.06
percent rise seen in early May.
A separate report showed Mexico's economy grew 1.25 percent
in April at a seasonally adjusted pace compared to
the prior month, its best showing since November 2012, thanks to
a strong services sector.
The figure was well above the upwardly revised 0.61 percent
contraction registered in the prior month and exceeded the 0.90
percent expansion expected in a Reuters poll.
Compared to April 2013, economic activity
expanded 0.5 percent, compared to forecasts for a 0.20 percent
rise and an upwardly revised 3.24 percent increase the prior
(Reporting by Alexandra Alper; Editing by Andrea Ricci)