UPDATE 2-Mexico economy surges in Feb; Q1 seen up 3 pct

(Recasts; adds February data, background)

MEXICO CITY, April 29 (Reuters) - Mexico's economy surged 5.8 percent in February from the same month a year earlier, with strong growth in services and industry, the government said on Tuesday, despite a sharp slowdown in the United States, Mexico's key trading partner.

Economic growth in the January to March period was likely 3 percent, Deputy Finance Minister Alejandro Werner separately told reporters.

The service sector expanded 6 percent in February and industrial activity rose 5.7 percent year on year, according to the government's global economic activity indicator, using for the first time base data updated to 2003 from 1993.

Economic output MXIGDP=ECI declined 1.65 percent in February compared with January on a seasonally adjusted basis, however, according to the indicator, known as IGAE.

"We have very good figures from January and February," Werner told reporters. "So far, we see an economy growing in line with expectations."

Economists expect Mexico to weather a possible recession this year in the United States, as expanding credit allows consumers to spend more on products and services such as refrigerators and plane tickets and as oil revenue remains high.

Mexico's government has said it expects the economy to grow about 2.8 percent this year, down from 3.3 percent last year.

The U.S. economy likely braked sharply in the first quarter, growing at a sluggish 0.2 percent annual rate as consumers curbed spending and jobs disappeared, according to a Reuters poll of economists. First-quarter U.S. gross domestic product numbers are scheduled to be released on Wednesday.

In 2001, the last time the United States went into recession, Mexico's export-oriented factories were hit hard and the Mexican economy slumped.

Now, several years of low inflation and largely balanced budgets have helped stabilize the economy and bring down interest rates, increasing access to credit and encouraging consumer spending.

President Felipe Calderon's aggressive program of building highways and other infrastructure is also expected to stimulate the economy.

Mexico's economy grew at a 3.8 percent rate in the final quarter of last year, helped by a jump in activity in the service sector. (Reporting by Luis Rojas; Writing by Noel Randewich; Editing by James Dalgleish)