Prices in Mexico top inflation target

— Mexico’s consumer prices rose more than expected in early June, pushing annual inflation above the central bank’s target range even as signs of slower U.S. growth threaten to dampen demand for exports.

The central bank targets inflation at 3 percent, plus or minus one percentage point.

Prices rose 0.24 percent in the first two weeks of June, while annual inflation quickened to 4.30 percent from 3.85 percent in May, the national statistics agency said on its website Friday. The median estimate of 17 analysts surveyed by Bloomberg was for prices to rise 0.15 percent. Core prices gained 0.1 percent in early June, less than the 0.12 percent median forecast.

The economy grew at the fastest pace in six quarters in the first three months of the year, fueling demand and adding to pressure on inflation. Economists also have lifted their year-end inflation forecasts after the peso tumbled 9.5 percent against the dollar in May.

Food prices “will probably push inflation above 4 percent more quickly and at a slightly higher level than anticipated,” Analyst Rafael de la Fuente, an economist at UBS AG in Stamford, Conn., estimated that food prices will probably push inflation above 4 percent while interests rates will remain steady until the second half of next year.

Business, Pages 70 on 06/24/2012

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