Tue Jun 3, 2014 1:34pm EDT

(Reuters) – Brazil’s annual inflation rate is seen edging up for May but will remain within the central bank’s target range amid slowing economic growth, a Reuters poll showed.

Consumer prices likely rose 6.34 percent in the 12 months through May, up from 6.28 percent in the prior month, according to the median of 24 forecasts. The central bank’s target ceiling for inflation is 6.5 percent.

On a monthly basis, the benchmark IPCA index probably rose 0.43 percent, slowing from an increase of 0.67 percent in April, according to the median of 30 forecasts.

The anticipated easing in the monthly inflation rate is mainly due to a smaller rise in food prices, analysts said.

Slowing economic growth has also helped restrain inflationary pressures. The government reported on Friday that the gross domestic product grew 0.2 percent in the first quarter following a 0.4 percent gain in the fourth quarter.

Although inflation remains high, the central bank held rates steady last week for the first time in more than a year to see how the lagged effects of the recent increases would affect prices and economic growth.

The pause followed nine straight interest rate hikes in the year through April which took the bank’s benchmark interest rate to 11 percent.

The bank hinted that it could resume rate increases if inflation continues to rise, as economists forecast it will happen by year-end. The median forecast in a weekly central bank survey projects inflation at 6.47 for calendar year 2014.

Stubbornly elevated inflation is a headache for President Dilma Rousseff, who will seek re-election in October. It has also undermined business and consumer confidence, curbing investments and family consumption over the past few months.

Water-saving incentives to avoid rationing in Sao Paulo, Brazil’s largest city, also helped curb inflation in May, according to economists with Santander. Cia de Saneamento Básico do Estado de São Paulo SA is offering a discount to clients who reduce their monthly water consumption by at least 20 percent through December.

Brazil’s statistics agency IBGE releases its May inflation report on Friday at 9 a.m. local time (1200 GMT).

The individual analysts’ forecasts in the Reuters poll ranged for 0.33 percent to 0.49 percent for the consumer price gain in May.

Estimates for inflation in the 12-month period through May ranged from 6.24 percent to 6.40 percent.