UPDATE 1-Mexican inflation cools in early May but less than expected

 (Adds details annual rate, background)
    MEXICO CITY, May 24 (Reuters) - Mexican inflation cooled
less than expected in early May as higher gasoline and cooking
gas prices offset electricity subsidies, official data showed on
    Inflation              rose 4.46 percent in the 12 months
through the first-half of May, the national statistics agency
said, above a Reuters poll forecast for 4.40 percent, but down
from 4.69 percent seen in the first-half of April.
    Mexican inflation has fallen back toward the central bank's
3 percent target after spiking to a 16-1/2 year high close to 7
percent late last year. 
    Last week, the central bank held its key interest rate at a
nine-year high of 7.50 percent but policymakers warned they
could act if a weaker peso fans inflation pressures.   
    Mexican consumer prices fell 0.29 percent during the first
half of May, compared to forecasts for a 0.32 percent dip as
summer electricity subsidies kick in for northern Mexico. 
     The closely watched core price index             , which
strips out some volatile food and energy prices, climbed 0.13
percent in early May compared to estimates for a 0.12 percent

 (Reporting by Michael O'Boyle
Editing by Alistair Bell)