Brazil's October retail sales beat forecasts with biggest gain since March

SAO PAULO, Dec 11 (Reuters) -

Brazil's retail sales volumes unexpectedly rose in October, data from government statistics agency IBGE showed on Thursday, despite signs of a slowdown in Latin America's largest economy amid high interest rates.

* Sales were up 0.5% in October from the previous month, while economists in a Reuters poll expected a decrease of 0.1%.

* It was the largest monthly gain since March, according to IBGE.

* Sales also grew 1.1% from the year-earlier period, compared to expectations for a 0.2% drop in the Reuters poll.

* High borrowing costs had been weighing on consumption, with Brazil's benchmark interest rate currently at a

near two-decade high

of 15% in a bid to curb sticky

inflation

.

* Seven out of the eight sectors surveyed posted gains in October from September, IBGE said.

* "The data indicate a solid start to Q4, countering headwinds from elevated borrowing costs and stricter credit amid a resilient - though softening - labor market," said Pantheon Macroeconomics' chief Latin America economist Andres Abadia.

(Reporting by Gabriel Araujo, Editing by Daina Beth Solomon)