UPDATE 1-Mexico annual inflation rate up in early August

(Rewrites first paragraph, adds context on rates, growth)

MEXICO CITY, Aug 24 (BestGrowthStock) – Mexican consumer prices
increased less than expected in early August but the annual
inflation rate rose for the first time in five months in a sign
of economic recovery.

The annual inflation rate rose to 3.71 percent at
mid-August from 3.66 percent a month earlier, the central bank
said on Tuesday.

Consumer prices (MXINFL=ECI: ) rose 0.16 percent in the first
half of the month.

Mexico’s economy posted one of the steepest contractions
anywhere in the world last year and a slow recovery has kept
inflation muted. Most investors expect the central bank will
not raise interest rates until well into 2011.

Tuesday’s price data reinforces the view that the central
bank’s next move will be to hike borrowing costs.

Closely watched core prices (MXCPIX=ECI: ), which strip out
some volatile food and energy elements, were up 0.09 percent
during the first half of the month.

Analysts polled by Reuters had expected consumer prices to
rise 0.24 percent and core prices to climb 0.18 percent in the
first half of the month.

In a separate report, Mexico posted a $1.0 billion trade
deficit (MXTBAL=ECI: ) in July after posting a revised deficit of
$341 million a month earlier, the national statistics agency
said. Analysts polled by Reuters had expected a trade deficit
of $708 million in July.
(Reporting by Jason Lange, Editing by W Simon )

UPDATE 1-Mexico annual inflation rate up in early August