UPDATE 1-Mexico Dec retail sales up 1.3 pct, below forecast

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MEXICO CITY, Feb 20 (Reuters) - Mexican retail sales rose a lower-than-expected 1.3 percent year-on-year in December, the government said on Tuesday, in what could be another sign that a long-anticipated economic slowdown is finally taking hold.

Analysts surveyed in a Reuters poll ECONMX were expecting retail sales MXRSLY=ECI to rise 3.0 percent.

Wholesale sales, often an indicator of future retail sales performance, were up 3.1 percent compared with December 2005.

Retail sales fell 0.34 percent from November on a seasonally adjusted basis, the government said.

Mexico's economy grew a healthy 4.8 percent last year but the government expects growth of only 3.6 percent this year as the U.S. economy slows down.

The slower growth in retail sales in December followed news last week of much lower-than-expected industrial production growth in the same month.