* Retail sales up 1.0 pct m/m; Reuters poll saw 0.3 pct
* Sales up 3.8 pct y/y, in line with Reuters poll
* Sales have risen two months in a row after July slump
MEXICO CITY, Nov 21 Mexican retail sales rose
more than expected in September, damping fears that the global
slowdown is dragging down consumption in Latin America's No. 2
Retail sales rose 1.0 percent in September
from August, beating expectations in a Reuters poll for a 0.3
percent increase and just below the 1.1 percent rise notched in
August from July, the national statistics office said on
The Mexican economy grew at a healthy clip in the first half
of 2012, but the government has said it expects growth to ease
in the second half, resulting in 3.5 to 4 percent growth for the
Mexico's economic growth slowed in the third quarter to its
lowest pace in 1-1/2 years, recording a slim 0.5 percent
expansion compared to the prior quarter.
But growth is still expected to outpace that of many other
countries in the region, supporting consumer spending.
"The underlying growth, the month-on-month growth, is pretty
strong ... We would expect retail sales to continue growing at
that sort of pace," said David Rees, an economist at Capital
Economics in London, who notes that the country has not seen the
unsustainable credit expansion or commodities windfall that
boosted consumption in other regional competitors.
Mexican consumer confidence rebounded in October after
slumping for two months, supported by cooler inflation and
falling unemployment, according to data released earlier this
Still, other analysts said the recent run of five straight
months with inflation above 4 percent could hurt spending.
"Even though we have seen a decrease in inflation generally,
it is still at high levels, which makes us think that household
consumption could be limited," Banorte economist Alejandro
Cervantes wrote in a note to clients.
Annual inflation eased in October off a 2-1/2 year high
reached in September, backing policymakers' insistence that the
September level was only temporary, even though the bank has
warned it may hike rates if price pressures increase again.
Investors expect the Banco de Mexico to hold its benchmark
interest rate steady at 4.5 percent through 2013 as it balances
inflation against the risks from slowing global growth.
Retail sales in September adjusted for seasonal factors
were up 3.8 percent from a year earlier, in line
with expectations in a Reuters poll but decelerating from