Mexico's inflation dips in early January

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MEXICO CITY —

Mexico's central bank says the country's stubbornly high inflation has dipped in early January because of lower prices for electricity and some fruits and vegetables.

The bank says inflation was running at a yearly pace of 6.4 percent, compared to 6.5 percent in December.

Expecting the drop, the bank recently cut interest rates 50 basis points to spur the economy and help Mexico buffer the impact of the U.S. recession.

President Felipe Calderon in early January cut household gas and electricity rates and froze gasoline prices in 2009.

The bank has forecast inflation will drop to 4 percent for 2009.

The government has predicted no growth for 2009, while the bank's president Guillermo Ortiz has called that "optimistic."

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