WRAPUP 1-Argentine economy grew 7.6 pct in March

(Adds industrial output details, analyst, background, byline)

By Lucas Bergman

BUENOS AIRES, May 17 (Reuters) - Argentina's economy grew a slower-than-expected 7.6 percent in March compared with the year-ago period, the government said on Thursday, as the country's trade surplus shrank more than market forecasts.

Strong consumer largely spending was the main driver pushing Latin America's third-largest economy to expand for a 52nd straight month.

"We're seeing record levels of consumption that are driving overall economic activity," said Paola Tessone, an analyst at the Broda consultancy group. "In the second quarter, growth is going to accelerate because of the crop harvest."

The growth in March fell short of a forecast of 8 percent in a Reuters poll of 14 analysts and economists in which estimates ranged between 7.5 percent and 8.9 percent.

The economy expanded 0.9 percent in March from February, according to the monthly index of economic activity, or EMAE. The index contains most elements of gross domestic product, which is reported quarterly by the Argentine government.

March's growth helped the economy expand by 8.0 percent in the first quarter, the Economy Ministry said.

The Argentine economy has grown by more than 8 percent in each of the last four years, rebounding from a deep crisis in 2001-2002. Argentina's central bank forecasts growth this year of 8 percent.

Increased consumer spending and industrial production have helped fuel the boom.

The ministry also reported that Argentina's trade balance narrowed in April more than the market had expected, shrinking by 18.3 percent compared with the same month last year as imports soared.

The surplus in April was $1.12 billion compared with $1.23 billion in April 2006, even though exports climbed to a record as grains exports grew both in quantity and value.

Exports grew by 9 percent in April to a record $4.26 billion while imports rose 23 percent to $3.14 billion.

Analysts said they were eyeing the exports figure closely.

"An important issue is the quantity of exports is growing slowly," Tessone said.

A Reuters survey of 14 analysts gave a median forecast of $1.2 billion, with estimates ranging from $990 million to $1.62 billion.

Argentina is the world's No.3 exporter of soybeans, the second-biggest supplier of corn and a top-five wheat exporter. This year's ongoing corn and soy harvest are expected to be the biggest ever.