Mexico Annual Inflation Eases in First Half of March Reuters
go to original March 22, 2012

MEXICO CITY - Mexican price pressures were muted in the first half of March with the annual inflation rate lower than that registered at the end of February and investors expecting the central bank to keep rates on hold through the year.

In the first half of March, consumer prices rose 0.05 percent, which was lower than the 0.15 percent expected by analysts in a Reuters poll.

Inflation in the 12 months through mid-March was 3.72 percent, remaining below the 4 percent annual inflation target ceiling and easing from the 3.87 percent rate in the year through end-February.

The median forecast in Reuters poll was for 3.83 percent in the year to March 15. [ID: nL2E8EGE5F]

Banco de Mexico Governor Agustin Carstens has said that he can tolerate somewhat-elevated inflation while the Mexico economy gains strength.

Early this month, analysts essentially held their view for growth steady at 3.34 percent compared to their view a month earlier. Latin America's second-largest economy grew by 3.9 percent last year.

A measure of investor sentiment shows the central bank holding rates steady through the rest of this year.

Core consumer prices, which strips out volatile factors like energy costs, rose 0.16 percent in the first half of February while analysts had expected a 0.18 percent increase.

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