MEXICO CITY (Reuters) – Mexican annual inflation likely accelerated in May to nearly 3% due to price pressures from processed foods and some agricultural services and products, according to a Reuters poll published on Friday.

The median inflation forecast from 11 analysts was for a rate of 2.97% through the end of May, compared to 2.15% in April.

That would keep headline inflation just below the Bank of Mexico’s 3% target and could give it room to continue cutting its benchmark interest rate.

The Bank of Mexico lowered its benchmark rate to the lowest in 3-1/2 years on May 14, hinting that more cuts could be on the horizon and warning the coronavirus pandemic’s effects would be felt more strongly in the second quarter.

Compared to the previous month, prices are seen rising 0.51%, the poll showed, while core prices, which strip out some volatile energy and food prices, are expected to rise 0.40%.

Annual core inflation is seen accelerating to 3.75%.

Mexico’s national statistics agency INEGI will publish the official inflation data for May on Tuesday.

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