UPDATE 2-Mexico central bank poll sees higher inflation

* Analysts lift inflation expectations in central bank poll

* Growth also seen higher at 3.59 percent in 2011

* Weak world environment seen as risk to outlook

* S&P affirms Mexican debt rating
(Adds S&P affirming Mexican debt rating)

MEXICO CITY, Dec 17 (BestGrowthStock) – Analysts following Mexico’s
economy slightly raised their expectations for 2011 inflation
and economic growth, a poll showed on Friday.

A survey carried out by the central bank in December showed
consumer prices were seen rising 3.82 percent next year, up
from a forecast of 3.77 percent in the previous month.

Analysts’ forecasts for economic growth next year were also
higher, with growth seen at 3.59 percent compared with 3.46
percent in the previous poll.

Mexico is limping back from a deep recession and export
growth is slowing as the recovery in the United States —
Mexico’s top trade partner — loses steam.

Analysts surveyed said the weak world economic environment
and global markets, along with a lack of structural reforms,
were risks to growth in the shorter term.

Standard & Poor’s affirmed on Friday Mexico’s foreign debt
rating at BBB, citing Mexico’s conservative economic management
and limited external funding needs compared to other similarly
rated nations. For more see [ID:nWNA7361].

The agency, which downgraded Mexican debt last December as
political gridlock stalled efforts to shift the government’s
revenue base away from the declining industry, warned Mexico
continues to suffer from limited fiscal flexibility and said
spiraling drug violence was having an unspecified impact on
growth and investment.

The central bank, which has held benchmark interest rates
(MXCBIR=ECI: ) at 4.5 percent since July 2009, expects the
economy to grow no more than 4.2 percent in 2011 after
expansion of about 5 percent this year.

It sees inflation, currently running at 4.32 percent
(MXCPIA=ECI: ), declining to levels consistent with the central
bank’s 3 percent target by the third quarter of 2011.

This outlook backs economists’ expectations that rates will
stay on hold all next year before a 25-basis-point hike in
early 2012.
(Reporting by Krista Hughes; Editing by James Dalgleish)

UPDATE 2-Mexico central bank poll sees higher inflation