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Spain retail rises for first time since 2010 in September

MADRID (Reuters) - Spanish retail sales rose for the first time since June 2010 in September, data showed on Tuesday, pointing to signs of life in a long depressed domestic economy as the country exits a two-year recession.

Retail sales rose by 2.2 percent year-on-year on a calendar-adjusted basis in September, data from the National Statistics Institute (INE) showed, after a revised 4.8 percent drop a month earlier.

Analysts welcomed the data, but said the main reason for the increase was a sales tax hike in the same month last year.

"We've not seen a rise in retail sales for many years but the comparison is with a month last year in which retail sales plummeted due to the sales tax rise," said Jose Luis Martinez, economist at Citi in Madrid.

"It's a good figure, but we need to wait a couple of months before drawing any conclusions."

The INE is expected to confirm on Wednesday that Spain emerged from a two-year recession in the third quarter, as exports and a strong tourist season helped the battered economy grow 0.1 percent from a quarter earlier.

However, domestic demand remains in the doldrums, with shoppers keeping a tight rein on their purse strings while facing unemployment of 26 percent.

On a month-to-month basis retail sales fell 2.5 percent, suggesting high street spending remains muted.

(Reporting by Paul Day; Editing by Clare Kane; Editing by John Stonestreet)