UPDATE 2-Mexico retail sales rise more than expected in Aug

* Retail sales up 0.73 pct in Aug; July up 0.63 pct (rev)

* Yr/yr sales climb 4.4 pct; forecast was +3.45 pct
(Adds detail, background)

MEXICO CITY, Oct 20 (BestGrowthStock) – 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
(MXRTSL=ECI: ) 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.”
(Reporting by Patrick Rucker and Luis Rojas Mena; Editing by
Andrea Ricci)

UPDATE 2-Mexico retail sales rise more than expected in Aug