Correction to Mexican Inflation Gained Speed Article

By Anthony Harrup Features Dow Jones Newswires

Mexico's annual inflation rate continued to accelerate in the first half of May despite seasonal respite from a cut in residential electricity rates, reaching its fastest pace since mid-April 2009.

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The consumer-price index fell 0.34% in the first two weeks of the month, but the annual inflation rate rose to 6.17% from 5.82% at the end of April and 2.53% a year before, the National Statistics Institute said Wednesday.

Energy costs fell at the start of the month as summertime electricity subsidies to help cover the cost of air conditioning in hot northern cities went into effect. That was partly offset by increases in prices of goods affected by the depreciation of the Mexican peso, and by a jump in Mexico City bus fares that was authorized in April to compensate for January's sharp rise in gasoline and diesel prices.

Core CPI, which excludes energy, fresh fruit and vegetables, and government-controlled tariffs, rose 0.15% in the first half of May to an annual rate of 4.75%.

Inflation has been above the Bank of Mexico's 2%-4% target band since January, prompting the central bank to raise interest rates further. The bank lifted the overnight interest rate target by a quarter percentage point last week to 6.75%, the sixth consecutive meeting at which it raised rates.

Banks surveyed this week by Citibanamex increased their median estimate for year-end inflation to 5.74% from 5.60% two weeks before.

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Write to Anthony Harrup at anthony.harrup@wsj.com

Corrections & Amplifications

This item was corrected at 10:09 a.m. ET. The Mexican consumer-price index fell 0.34% in the first two weeks of the month, not 0.38%.

"Mexican Inflation Gained Speed in Early May," at 9:58 a.m. EDT, incorrectly stated in the second paragraph that CPI fell 0.38% in the first half of May. The consumer-price index fell 0.34% in the first two weeks of the month. (May 24, 2017)

(END) Dow Jones Newswires

May 24, 2017 10:23 ET (14:23 GMT)