Mexico's gross domestic product will grow in the range of 4 percent to 5 percent this year, up from initial forecasts of 3.8 percent to 4.8 percent, the Bank of Mexico said.

The 2012 growth forecast for GDP remains at 3.8 percent to 4.8 percent, the central bank said.

"Both the recent performance of the economy, as well as its main determinants, suggest that there could be higher GDP growth in Mexico in 2011 than forecast in the previous report on inflation," the Bank of Mexico said.

Rising industrial production in the United States and stronger consumer demand in Mexico in the first quarter are among the positive factors pointing to more robust economic growth, the central bank said.

The economy will create between 600,000 and 700,000 jobs annually in 2011 and 2012 if it grows at the projected levels, the Bank of Mexico said.

Rising consumer demand could translate into higher imports, with the balance of trade deficit projected at $5.7 billion and the current account deficit forecast to hit $11.3 billion this year, putting both indicators well above the 2010 level, the central bank said.

Inflation is expected to be in the range of 3 percent to 4 percent this year, well within the central bank's target of 3 percent, plus or minus one percentage point.