* Argentine economy going strong
* February trade surplus bigger than expected
* February industrial output rises vs. January (Adds analyst comments, context)
By Hilary Burke
BUENOS AIRES, March 23 (Reuters) - Argentina's February trade surplus beat market expectations and industrial output rose sharply again, the government said on Wednesday, showing Latin America's No. 3 economy is still growing strong.
Argentina's economy expanded at a quick 9.2 percent last year, driven by robust consumer spending, lucrative grains exports and industrial production. [ID:nN18257577]
Imports had been growing at double the rate of exports in recent months due to avid domestic demand and the local currency's appreciation against the dollar in real terms -- cutting into the government's cherished trade surplus.
But February's trade surplus
This was well above the median forecast of $310 million
given in a Reuters poll of 12 analysts and marked a significant
improvement over January, when the surplus shrank 58 percent
year-on-year, and December's 80 percent plunge
In February, exports grew 33 percent from the same month last year, compared with 22 percent in January. Import growth slowed to 39 percent from 52 percent in January.
"The increase in exports is due to three factors: the good grains harvest, excellent commodities prices and strong demand from Brazil" for Argentina's industrial goods, said Ramiro Castineira, an analyst at Econometrica consultancy.
He noted that higher prices for Argentine goods explained a good part of the increase in exports, while imports were generally sustained by greater volumes.
Argentina's center-left government is working to protect local industry and the trade surplus. Officials expanded import permits this month to cover 50 percent more goods, sparking complaints from trading partners. [ID:nN09298892]
The trade surplus is one of the centerpieces of the current economic model, allowing the government to accumulate foreign currency reserves, which it uses to pay off debt.
INDUSTRY
Industrial production
In year-on-year terms, factory output rose 9.0 percent in February, matching the number announced earlier this week by President Cristina Fernandez. [ID:nN22164565]
The non-seasonally adjusted figure fell slightly short of market expectations, however, with a Reuters poll of six analysts giving a 9.3 percent median forecast.
The pace of growth also cooled in February after hitting
double digits from November through January
Castineira said industrial production was still very strong, particularly in the automotive sector, but also in other segments, which will help drive overall economic growth.
His firm forecasts the economy will grow 6.5 percent this year after expanding 8.5 percent in 2010. Private economists say official data exaggerates growth somewhat, due to the gross under-reporting of inflation. [ID:nN15268486] (Additional reporting by Juliana Castilla; Editing by Dan Grebler)