Brazil's retail sales fall for third straight month in January

SAO PAULO, March 14 (Reuters) - Brazil's retail sales volumes fell for a third consecutive month in January, government statistics agency IBGE said on Friday, adding to a string of recent data pointing to a slowdown in Latin America's largest economy.

Sales were down 0.1% in January from the previous month, IBGE said, extending the negative streak seen since November amid tight financial conditions, and after industrial output and services activity data for the month had also signaled weakness.

Economists in a Reuters poll expected a decrease of 0.2%.

Four of the eight main groups surveyed by IBGE posted drops in January, with pharmaceutical products and food sales among the biggest decliners. Sales of office supplies and fuel, on the other hand, were up on a month-over-month basis.

Brazil's central bank has been tightening monetary policy to return inflation to its 3% target. Markets expect the central bank next week to deliver a third straight 100-basis-point hike, which would bring its benchmark interest rate to 14.25%.

On a yearly basis, retail sales grew 3.1% in January, IBGE said, compared to expectations for a 1.9% increase in a Reuters poll of economists.

"The apparently solid headline numbers at the broad level were largely mean-reversion," said Andres Abadia, chief Latin America economist at Pantheon Macroeconomics.

"The overall report points to continued weakness, with underlying economic factors suggesting the deterioration in consumer spending persisted at the start of this year."