UPDDATE 1-Mexico economy grows 3.2 pct in 2nd qtr vs 1st qtr

(Rewrites throughout with context)

MEXICO CITY Aug 20 (Reuters) - Mexico's economy grew 3.2 percent in the second quarter from the previous three-month period MXGDPQ=ECI in a sign of economic recovery, though a contraction in June pointed to weakness for Latin America's second-largest economy.

In annual terms, the economy expanded 7.6 percent compared to a year earlier MXGDPY=ECI, the national statistics agency said on Friday. That was above the 7.4 percent increase forecast in a Reuters poll.

A monthly indicator of economic activity also released on Friday. It indicated that the economy contracted 0.4 percent in June from the previous month MXIGAE=ECI.

That report showed growth of 6.77 percent in June from a year earlier MXIGDP=ECI, below the 7.0 percent reading expected by analysts. (Reporting by Patrick Rucker, Editing by W Simon )