POLL-Mexico's annual inflation likely sped up in March

MEXICO CITY, April 8 (Reuters) - Mexico's annual inflation likely accelerated in March while staying within the central bank's target range, a Reuters poll found on Tuesday, fueling expectations that the central bank will again cut its benchmark interest rate by half a percentage point.

The median estimate from 18 analysts showed a year-on-year rate of 3.80% for the headline consumer price index, up slightly from 3.77% in February. MXCPIA=ECI

The central bank, known as Banxico, has an official target rate of 3%, plus or minus a percentage point.

Estimates for core inflation, considered a more reliable measure of price trends as it excludes volatile energy and food prices, indicate that the rate would have held steady at 3.65%. MXCCPI=ECI

In March alone, prices are expected to have grown by 0.31% compared with the previous month, while for the underlying index, an increase of 0.43% is expected. MXINFL=ECI, MXCPIX=ECI

Last month, the central bank cut its benchmark rate by 50 basis points to 9%, the lowest level since 2022. The board also signaled that the size of the cut, its second in a row of half a percentage point, could be matched in future decisions if the inflationary environment allowed.

Analysts argue that rate cuts in Mexico would boost the nation's weakened economy, which like other nations has suffered a blow from U.S. President Donald Trump's sweeping tariff policies.

According to a Citi survey released this week, the market expects Mexico's economy to grow by just 0.3% this year, down from the 0.6% estimated previously.