UPDATE 2-Venezuela says economy grew over 3.5 pct in Q3

Mon Nov 14, 2011 7:55pm EST

* Economy grew 2.5 pct in Q2 vs previous year

* Chavez gearing up for election next October

* Repatriated gold reserves to begin arriving

By Daniel Wallis and Marianna Parraga

CARACAS, Nov 14 (Reuters) - Venezuela's economy grew more than 3.5 percent during the third quarter of 2011 compared with the same period a year ago, the head of the central bank in the South American OPEC member said on Monday.

Its economy expanded 2.5 percent in the second quarter and 4.8 percent in the first quarter versus the same periods in 2010, boosting the government's confidence in sustained growth following an 18-month recession that ended late last year.

President Hugo Chavez is seeking to spur the economy ahead of an election next October at which he has vowed to win another six-year term despite recovering from cancer.

"All the sectors grew in the third quarter," Chavez said in a televised meeting at the Miraflores Palace with the president of the central bank, Nelson Merentes, and other officials.

"Good news for the country and I congratulate the workers and all those who have been involved in the economy and the economic growth. In this way, the economy will keep growing."

Chavez said the transport and manufacturing sectors had expanded by 2 percent in the third quarter, while construction and communication had both grown by 6 percent. The crucial oil sector grew at more than 0.2 percent, he added.

"Fortunately, the worst years for the economy have passed. 2009 and 2010 were very tough years," Merentes said.

The central bank chief added that a first shipment of gold reserves that Chavez ordered repatriated from Western banks would begin arriving in Venezuela at the end of the month.

Experts have cautioned that the operation to bring home some 190 tonnes of bullion worth more than $11 billion will be risky, slow and expensive.

"We have now signed the contract with the company in charge ... the first load will be here in 15 days," Merentes said.

Chavez announced the move in August as a "sovereign" step that would help protect Venezuela's foreign reserves from economic turbulence in the United States and Europe. Most of Venezuela's gold held abroad is in London.

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