Mexico's consumer price index (CPI) quickened to an annual 3.77pc in February, as deceleration in agriculture prices was offset by faster inflation in services prices.
Headline inflation rebound from a four-year low of 3.59pc in January, but held for a sixth consecutive month within the central bank's target range of 2pc to 4pc.
The result, reported by statistics agency Inegi on 7 February, was slightly below the 3.76pc median estimate from 38 analysts polled in Citi Research's 5 March survey.
Fruit and vegetable prices contracted 5.54pc in February after a 7.73pc contraction in January, which more than offset the 5.71pc inflation in egg prices driven by bird flu containment. It was not enough, however, to overcome services inflation of 5.53pc in February, up from 5.25pc the prior month, with notable increases in higher education prices.
Despite the higher headline rate, Mexican bank Banorte, said the inflation trend remains favorable with short-term climate conditions suggesting fruit and vegetable prices may be less volatile in coming months than the same time last year.
As such, Banorte confirmed its call for the central bank to issue a second consecutive half-point cut to its target interest rate on 27 March, which would take it to 9pc from 9.5pc.
Banorte also noted stability in Mexico's core inflation, which excludes volatile energy and food prices, to 3.65pc in February from 3.66pc the previous month.
Meanwhile, energy inflation eased to 3.74pc in February from 6.34pc the previous month, with electricity inflation easing to 5.07pc from 5.32pc in January.
The trend for energy inflation is "encouraging", said Banorte, noting the recent OPEC+ move to gradually raise production from April, helping to lower international reference prices. The bank also cited the recent agreement between President Claudia Sheinbaum and gasoline dealers to cap low-grade fuel at Ps24 per liter ($4.46/gallon).
By James Young
