POLL-Mexico's annual inflation likely accelerated in May, exceeding central bank target

MEXICO CITY, June 6 (Reuters) - Mexico's annual inflation likely accelerated in May to above the official target, a Reuters poll showed on Friday, complicating the central bank's efforts to keep cutting its key rate amid a weakening economy.

The median forecast from 10 analysts showed a rate of 4.39% for the year-on-year headline inflation rate for May, up from 3.93% in April. MXCPIA=ECI

Core inflation, considered a better indicator of price trends because it strips out some especially volatile food and energy prices, likely also accelerated to 4.04%. MXCCPI=ECI

May consumer prices likely edged up 0.23% from the previous month, while core prices are expected to have risen 0.27%, according to the survey. Official data will be released on Monday. MXINFL=ECI, MXCPIX=ECI

Mexico's central bank, which has an inflation target of 3%, plus or minus one percentage point, cut its benchmark interest rate by 50 basis points last month for the third consecutive time to 8.5%, its lowest level since 2022.

In its statement, the Bank of Mexico said the current inflation environment could allow it to continue its easing cycle, potentially with further cuts of similar magnitude. The next monetary policy decision is scheduled for June 26.

The board also noted continued weakness in economic activity. Although Mexico avoided a technical recession in the first quarter, analysts warn the economy remains at risk of contracting.