UPDATE 1-Ecuador economy to grow around 5 pct in 2012-president

Wed Dec 12, 2012 5:33pm EST

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* Correa sees 2012 inflation rate under 5 percent

* Says economic growth has cut poverty rate

By Alexandra Valencia

QUITO, Dec 12 (Reuters) - Ecuador's economy is likely to grow around 5 percent in 2012, while the inflation rate for the full year will be less than 5 percent, President Rafael Correa said on Wednesday.

High oil revenues have allowed Correa to boost state spending on infrastructure and welfare, which has fueled economic growth in the past few years. The economy expanded 8 percent in 2011 and 3.3 percent in 2010.

"We hope to end the year with growth of around 5 percent. Inflation will be within forecasts, under 5 percent," Correa said in a press conference at the presidential palace.

"Our (economic) growth is healthy. Poverty rates and inequality have decreased."

According to polls Correa is the clear favorite to win an election in February 2013. The good state of the economy is likely to help his re-election bid.

Central bank president Pedro Delgado told Reuters last month that he expected the construction and energy sectors to lead growth in 2012 and 2013 due to investment by both the private and public sectors.

Ecuador's credit rating outlook has been raised by Moody's, Fitch and Standard & Poor's this year. The rating agencies kept the default-prone Andean country in junk bond territory, but noted its improved ability to find financing and good economic growth.

Ecuador is OPEC's smallest member and has benefited from high crude prices this year.

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