UPDATE 1-Venezuelan economy grew 8.9 pct in Q2 -cenbank

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CARACAS, Aug 14 (Reuters) - Venezuela's economy grew 8.9 percent in the second quarter, the central bank said on Tuesday, but the OPEC nation's all-vital oil sector shrank by 3.9 percent as the state boosted its involvement in oilfields.

Venezuela has witnessed an economic boom under President Hugo Chavez thanks to soaring oil prices and heavy government spending, but inflation and slumping oil production remain nagging problems.

The non-oil sector grew by 10.8 percent, spurred largely by the banking and communications sectors, the central bank said.

But private sector oil GDP tumbled 11.6 percent as Chavez edged out U.S. oil companies ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz) and Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) in the takeover of four oil projects as part of his self-styled socialist revolution.

Venezuela had a second-quarter current account surplus of $5.13 billion, down from $8.54 billion a year earlier, while the financial account deficit grew to $11.53 billion compared to $9.36 billion a year earlier.

The economy grew 10.3 percent in 2006 and 8.8 percent in the first quarter of 2007, but twelve-month inflation to July was the highest on the continent, at 17.2 percent.

Venezuela's official oil production figures show output at 3.1 million barrels per day (bpd), but market watchers say the South American nation is only producing about 2.4 million bpd.

Finance Minister Rodrigo Cabezas said on Tuesday the economy would grow by no less than 8 percent in 2007. (Reporting by Brian Ellsworth)