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Mexico Retail Sales Rise More Than Expected in Aug
 Patrick Rucker & Luis Rojas Mena - Reuters
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October 21, 2010
Mexico City - Mexican retail sales rose more than expected in August as consumers responded to strengthening in Latin America's second-largest economy.
Retail sales rose 0.73 percent in August from July in the second-straight monthly expansion of spending according to seasonally adjusted figures.
Sales increased 4.4 percent in August compared to the same month a year earlier MXRSLY=ECI, the national statistics agency said on Wednesday..
Analysts surveyed by Reuters had expected sales to rise 3.45 percent compared to August 2009.
August sales seemed to get a boost from back-to-school shopping as paper products and computer equipment were among the products that saw an uptick in sales.
Economists and investors are eager to see an increase in consumer spending as Mexico's economy recovers from last year's recession, its worst since the 1930s.
The fate of the Mexican economy is closely tied to that of the United States, which absorbs roughly 80 percent of Mexico's exports. Increased demand north of the border helps explain why many analysts expect the economy to expand by as much as 5 percent this year after a 6.5 percent contraction in 2009.
"Manufacturing exports and industrial activity are still supporting real GDP," Alberto Ramos, a Goldman Sachs economist, wrote in a research note.
Growth is expected to slow in 2011, however, and analysts hope that domestic buying can help give a lift if export demand is curtailed.
The Mexican economy must boost domestic demand in the near-term, Ramos wrote, because "there is a risk that the industrial cycle could loose momentum in the near future."
(Editing by Andrea Ricci)
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