* Private spending growth slows to weakest since 1Q 2010
* Aggregate demand flat quarter over quarter
MEXICO CITY, March 14 - Growth in Mexican private spending slowed sharply during the fourth quarter, but solid economic data in early 2012 may ease concerns that the economy could lose steam this year.
Private spending rose just 0.6 percent during the final months of 2011, compared to a downwardly-revised 1.83 percent rate in the previous quarter, the national statistics agency said on Wednesday.
The fourth-quarter rate marked the weakest pace of expansion in private spending since the first quarter of 2010, in line with a slowdown in overall economic growth.
Mexico's economy grew at its slowest quarter-on-quarter pace in 2-1/2 years in the final months of 2011. The government expects 3.5 percent growth in Latin America's second-largest economy this year, down from 3.9 percent in 2011.
But data this week showed surprisingly strong industrial output in January and a surge in automobile production in February, eroding any case for the central bank to cut interest rates.
The Banco de Mexico has said it is in neutral mode and the next move could be either up or down. Most analysts see no change to the current 4.5 percent benchmark any time soon.
Solid U.S. jobs data bodes well for the nearly 80 percent of Mexican exports that are sent to its northern neighbor. Analysts will look to see whether the central bank will sound more optimistic about growth at its rate decision on Friday.
"Given evidence that the economy continues to expand at a moderate around-trend pace .... we expect the central bank to remain on hold in the near term, and likely for the foreseeable future," Goldman Sachs economist Alberto Ramos wrote in a note to clients.
Analysts unanimously expect the Banco de Mexico to hold its benchmark interest rate steady at Friday's meeting, according to a Reuters poll, while the interest rate swap market is eyeing the chance of a rate hike by the end of the year.
Private spending was 4.2 percent higher in the fourth quarter than during the same period a year earlier. Third-quarter spending was revised down to 4.9 percent from a previously reported 5.2 percent, and quarter-on-quarter growth was revised down from 2.2 percent.
Aggregate demand was flat from the previous quarter , slowing from a 0.81 rate in the third quarter, which was sharply revised downward from 2.2 percent.
Demand rose 3.9 percent from the same quarter in the previous year. Third quarter demand, year on year, was revised up to 5 percent from 4.9 percent.