By Martin Santa
BRUSSELS (Reuters) - Retail sales in the euro zone defied expectations of a fall and rose on the month in March driven by sales of food, drinks and tobacco, data showed on Tuesday, but spending patterns differed widely across the bloc.
Retail sales, a proxy for household demand, rose 0.3 percent on the month in March after a downwardly revised 0.1 percent rise in February, beating market expectations of a 0.2 percent drop, data from the EU's statistics office Eurostat showed.
Euro zone economic recovery is still strongly export-driven as Europeans remain reluctant to spend given record-high unemployment and the still uncertain economic outlook.
Economists expect the European Central Bank, which meets on monetary policy on Thursday, to keep interest rates on hold and give further guidance on what it might do to fight very low inflation and the risks of deflation.
The monthly rise in retail sales in March was driven by a 1.3 percent jump in the sales of food, drinks and tobacco, showing the best performance since June 2011, according to Eurostat.
Compared with the same period of last year, the rise in volume of sales was broadly in line with expectations at 0.9 percent in March, slowing from an upwardly revised 1.0 percent growth in February.
The overall picture, however, remains mixed. While sales of non-food products - like computers, clothing or books - fell by 0.3 percent on the month, they showed a 1.9 percent rise on the year for a second consecutive month.
Sales in the euro zone's second largest economy France rose 2.3 percent on the month and 2.4 percent year-on-year, while sales in Germany fell 0.7 percent on the month, but were up 0.8 percent year-on-year.
On an annual basis all but four euro zone countries -- Spain, Malta, Slovenia and Finland -- saw the volume of sales rising.
(Reporting by Martin Santa)