Mexico's annual inflation hits 3.72% in early December, below expectations

MEXICO CITY, Dec 23 (Reuters) - Mexico's annual inflation rate hit 3.72% in the first half of December, official data showed on Tuesday, below the expectations of economists polled by Reuters who had forecast it to come in at 3.85%.

The closely watched core price index, which strips out some volatile food and energy prices, reached 4.34% in the 12 months through early December, also landing below expectations but still above the Bank of Mexico's target of 3% +/- one percentage point.

Analysts surveyed by Reuters saw annual core inflation at 4.43%.

Mexico's central bank cut its benchmark rate last week by 25 basis points, bringing it down to its lowest level since April 2022, despite indicating an increase in near-term inflation risks.

Banxico's board also raised its own inflation projections with analysts seeing the guidance change as a sign that it could interrupt its monetary easing cycle.

Month-on-month consumer prices rose 0.17% during the first half of December, also below the 0.3% increase expected by economists in the poll, while the core price index climbed 0.31%.