UPDATE 1-Mexican consumer sentiment dips for third month in March

Thu Apr 4, 2013 10:26am EDT

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* Seasonally-adjusted reading 94.9 in March

* 3rd monthly fall raises questions about internal demand

MEXICO CITY, April 4 (Reuters) - Mexican consumer confidence fell for the third month in a row in March, to a six-month low, raising concerns about consumer-driven growth in Latin America's No. 2 economy.

The seasonally adjusted confidence index dipped to 94.9 last month, its lowest since September, from a downwardly revised 96.5 percent in February, the national statistics agency said on Thursday.

Consumers' perceptions about their current economic situation, their ability to buy big ticket items, and growth prospects for the country dragged down the seasonally adjusted reading.

The unadjusted confidence index edged down to 95.4 in March from 95.5 in February.

Mexican consumption offset sluggish industrial production in the fourth quarter, but the overall economy's growth rate is seen slowing to 3.5 percent this year from 3.9 percent in 2012, due to weaker demand in the United States for local exports.

The central bank cut interest rates to an all time low of 4 percent last month in a bid to undermine the appeal of peso-denominated debt to foreign investors and cool a surge in the currency that could eventually hurt exporters and drag on growth.

Mexican retail sales rose in January at the fastest pace in two years rebounding from a slump in December.

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