EMERGING MARKETS-Latam FX heads for best month since May

* Mexico's economic growth slows to 0.4% in Q4 - preliminary data * Pemex to issue bond worth about $1.5 bln to refinance debt - sources * Brazil Finance Ministry not discussing changes to inflation targets * Colombia central bank ups 2023 inflation projection to 8.7% * Latam FX up 0.3%, stocks add 0.6% By Bansari Mayur Kamdar Jan 31 (Reuters) - Currencies in Latin America were on track for their best monthly performance in eight months as the U.S. dollar tumbled from multidecade highs on expectations that the Federal Reserve will soon slow the pace of its interest rate hikes. The MSCI's index for Latin American currencies was 0.3% higher at 1500 GMT and was on track for its best month since May, outperforming the broader emerging market index. Investors were focused on a host of central bank rate decisions this week from developed market peers, with a Federal Reserve rate decision on Wednesday, as well as Bank of England and European Central Bank rate decisions on Thursday. "Massive inflows into EM assets so far this year show that investors are not deterred by the narrowing rate differentials," Natalia Gurushina, emerging markets fixed income economist at VanEck, said in a note. The International Monetary Fund on Monday raised its output growth estimate on emerging markets for this year, with projections now showing the economic slowdown in the region may have bottomed out in 2022. Brazil and Mexico, Latin America's largest economies, were both upwardly revised in their 2023 economic growth by 0.2 and 0.5 percentage point, respectively. The Mexican peso edged up against the dollar, lagging other Latin American peers. Data showed Mexico's economic growth slowed to 0.4% in the fourth quarter amid tighter monetary conditions in Latin America's second-largest economy, but still ended 2022 in positive territory. Meanwhile, two company sources told Reuters that Mexican state oil firm Petroleos Mexicanos (Pemex) will issue a bond soon worth around $1.5 billion to refinance debt. The Colombian peso recovered 0.7% to 4,619 against the dollar after sharp losses in the last two sessions. The currency of Latin America's fourth largest economy was on track for its best month since November 2020, even as inflation remained persistent despite signs of slowing growth. The technical team of Colombia's central bank on Monday revised its inflation projection for this year to 8.7% from 7.1% previously, amid high prices which have led the bank's board to make sharp increases in borrowing costs. Currencies of copper producers Chile and Peru added 1.2% and 0.2%, respectively, supported by a muted dollar, while the Brazilian real gained 0.6% against the greenback. Brazil's economic policy secretary Guilherme Mello said discussions on changing inflation targets were not on the agenda of the Finance Ministry. Key Latin American stock indexes and currencies at 1500 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1031.57 -1.19 MSCI LatAm 2334.87 0.63 Brazil Bovespa 113252.27 0.87 Mexico IPC 54261.26 -0.48 Chile IPSA 5327.94 -0.19 Argentina MerVal 248404.33 1.029 Colombia COLCAP 1274.25 -0.47 Currencies Latest Daily % change Brazil real 5.0831 0.60 Mexico peso 18.7555 0.03 Chile peso 797.4 1.19 Colombia peso 4631 0.43 Peru sol 3.8479 -0.26 Argentina peso (interbank) 186.8800 -0.16 Argentina peso (parallel) 379 1.06 (Reporting by Bansari Mayur Kamdar in Bengaluru; editing by Jonathan Oatis)