* Mexico annual inflation cools for fifth month
* Avocado prices pull down rate, despite storms
* Data gives more room for rate cut
By Alexandra Alper
MEXICO CITY, Oct 9 Mexican inflation eased in
September for the fifth month in a row, despite flooding that
spoiled crops and drove up fresh food prices, boosting bets for
another widely expected interest rate cut.
Inflation in the 12 months through September
slowed to 3.39 percent from August's 3.46 percent rate, the
national statistics agency said on Wednesday, marking its
slowest pace since January.
The figure was below expectations for a 3.48 percent rise,
according to a Reuters poll.
Avocado prices pulled down the headline rate, while tomato
and gasoline prices rose, after twin storms last month killed at
least 130 people and flooded large areas of farmland.
The damage prompted the government to revise down its growth
forecast for the year to 1.7 percent.
Mexico's central bank is expected to cut its benchmark rate
from a record low of 3.75 percent by another 25 basis points in
October to help counter a slowdown in Latin America's No. 2
economy. It holds its next meeting on Oct.25.
The bank, which targets an inflation rate of 3 percent, plus
or minus one percentage point, unexpectedly lowered borrowing
costs last month after growth contracted in the second quarter
for the first time in four years.
The International Monetary Fund slashed its 2013 growth
outlook for Mexico on Tuesday to 1.2 percent after a
weaker-than-expected first part of the year.
Yields on short-term interest rate swaps edged down after
the data, as investors boosted bets for another cut.
Consumer prices rose 0.38 percent, below
expectations for a 0.46 percent rise, and up from a 0.28 percent
rise in August.
Core prices, which strip out volatile energy
and food prices, rose 0.32 percent, just below forecasts for a
0.35 percent increase and well above August's 0.09 percent rate.