UPDATE 4-Mexico to resist U.S. slowdown with lower growth

(Recasts, adds lower government growth outlook)

By Adriana Barrera and Noel Randewich

MEXICO CITY, Jan 11 (Reuters) - The Mexican economy can weather an expected U.S. slowdown this year but growth will be crimped due to Mexico's heavy reliance on its northern neighbor, the government and central bank said on Friday.

The United States is by far Mexico's largest trading partner, buying about 80 percent of all exports, and in the past when the U.S. economy has slumped it has hit the local economy too.

Several years of financial stability and windfall additional income from sky-high oil prices and billions of dollars of remittances from Mexicans working abroad have made Mexico less vulnerable to any U.S. downturn.

"We can expect that the Mexican economy is going to be able to resist fairly well this period of slowdown in the United States," Central Bank Gov. Guillermo Ortiz said in a speech at an economic event.

But Finance Minister Agustin Carstens said he will revise down his 2008 economic expansion forecast of 3.7 percent once he has January data in his hands because of the U.S. economic slump, which some economists predict will become a recession.

Carstens said private sector estimates of slightly more than 3 percent were more in line with this year's growth prospects.

"The outlook for the economy in general, without doubt, is affected," Carstens told the same economic forum.