Mexican retail sales jumped in April from March as stronger consumer demand gave a boost to an economy powered by exports to the United States.
Retail sales rose 1.1 per cent in April , surpassing analysts' expectations of a 0.39-per-cent increase, data from the national statistics agency showed Wednesday.
But the increase, the biggest since March last year, is still unlikely to put much pressure on central bankers to raise interest rates any time soon.
"The bottom line is that consumption continues to recover but at a slow pace because we have relatively high unemployment," HSBC economist Lorena Dominguez said, adding that she expected weaker sales figures in May.
Mexico's retailers' association, which includes leading retailers Wal-Mart de Mexico [WALMEXV.MX]/note> and Soriana [SORIANAB.MX]/note>, has already said sales fell in May because there was one less Saturday - usually a big shopping day - this year.
Retail sales in Mexico have mostly recovered from the recent global downturn but figures earlier this week showed that overall domestic demand in the first three months of the year grew at its slowest rate since the same quarter in 2010.
Goldman Sachs economist Alberto Ramos said private consumption growth had been relatively subdued so far, but a slow improvement in the labour market and stronger credit flows should support consumption in the future.
Uneven domestic demand and uncommonly low inflation in Mexico are two reasons investors expect central bank policy makers to keep rates on hold at the current 4.5 per cent through early next year.
Growth in year-over-year retail sales accelerated to 4.9 per cent in April.
Mexico's economy is expected to expand by more than 4.5 per cent this year, largely because of industrial output as factories churn out goods for the U.S. market.