UPDATE 1-Mexico's economy grew 2.8 pct in 2nd quarter

(Recasts throughout; adds figures for growth by sector)

MEXICO CITY, Aug 21 (Reuters) - Mexico's economy grew at a 2.8 percent annual rate MXGDPY=ECI in the second quarter, though data showed a sharp slowdown when adjusted for a holiday period, the national statistics agency said.

A Reuters poll of experts predicted growth of 3.20 percent in the second quarter.

Weaker oil production weighed heavily on Mexico's economic output, which is already feeling a pinch from a slowdown in its top trading partner the United States, the agency said on Thursday.

Mexico's growth rate would have been just 2.1 percent when taking into account the Holy Week vacation period, which fell in the first quarter of this year but in the second quarter of 2007, the agency said.

That is well below a holiday-period adjusted rate of 3.7 percent during the first quarter of 2008. The unadjusted figure for growth during the first quarter was 2.6 percent.

Production in the mining sector, where oil output is the most important component, plunged 9.1 percent, the statistics agency said.

Retail and services grew 3.5 percent in the quarter. The industrial sector expanded 1.3 percent, helped by a 3.7 percent rise in manufacturing. Agriculture was up 4.4 percent.

A steep slowdown in the United States, suffering from a credit crisis and a slump in the housing market, is expected to hurt growth in Mexico this year.

Mexico's government says the economy will grow around 2.8 percent in 2008. (Reporting by Jason Lange)