UPDATE 2-Mexico headline inflation speeds up in March, but below expectations

(Adds analyst comment in paragraphs 5 and 9)

By Natalia Siniawski

April 9 (Reuters) - Mexico's headline inflation sped up slightly in March, while the closely watched core rate continued to moderate, official data showed on Tuesday.

Annual headline inflation in Latin America's second-largest economy reached 4.42% in March, a modest increase from the 4.40% seen in February, although below the 4.50% expected by economists polled by Reuters.

Mexico's consumer prices rose 0.29% during the month, according to non-seasonally adjusted figures released by national statistics agency INEGI. The core index, which strips out some volatile food and energy prices, rose 0.44% during the month.

Annual core inflation stood at 4.55%, a decrease from the previous month's 4.64% and below the 4.62% projected by economists.

"The increase in the core component in March was the smallest for the month since 2020," said Andres Abadia, Chief Latin America Economist at Pantheon Macroeconomics, adding the improving underlying inflation picture could ease pressure on the Bank of Mexico to adhere to a hawkish stance.

In its March meeting, the Bank of Mexico approved a much-anticipated 25 basis point cut to its benchmark interest rate, bringing it down to 11%.

Despite this, members of the central bank's board remain reticent about claiming success in their efforts to curb inflation.

A majority of analysts, according to a poll conducted by Citi's Mexico unit and published last Friday, forecast that the Bank of Mexico will maintain the rate at its next meeting on May 9, before implementing another cut in June.

Abadia said a slowing economic recovery, the lagged effect of the peso's rebound and tight financial conditions meant inflation should remain on a downward trend in the coming months. (Reporting by Natalia Siniawski; Editing by Andrew Cawthorne and Christina Fincher)