Mexico Reports Slowdown in Inflation

Mexico’s inflation rate slowed in February, paving the way for declining interest rates and a new push for a consumer-driven economic expansion. The February rate of 1.34%, the slowest rate in the past six months, came in lower than a forecast of 1.4% in a Bloomberg News survey and easily beat January’s 2.53% inflation rate. Keeping inflation under control is crucial to Mexico’s goal of expanding its economy 3% this year. Morgan Stanley Dean Witter & Co., meanwhile, raised its growth forecast for the Mexican economy to 3.6% from 3.1%. “Stronger growth in the United States is going to provide major underpinning for additional Mexican aggregate demand,” wrote Ernest W. Brown, senior economist for Latin America at the firm. Brown raised his second-quarter growth forecast to 4.5% from 3% and his third-quarter prediction to 3.8% from 3.5%.