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UPDATE 1-Colombia's investment to slide, central bank says

Mon Apr 13, 2009 9:00pm EDT

(Adds details on economic outlook, remarks from central bank chief)

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BOGOTA, April 13 (Reuters) - Colombia's foreign direct investment could fall to between $5 billion and $6 billion this year from more than $10 billion last year due to the global crisis, the central bank chief said on Monday.

But the country's economic growth should strengthen in the second half of this year compared with the first six months as the economy is helped by policies implemented to counter the worldwide slump, Jose Dario Uribe said.

"Policies ... will mean that very probably the second half will see growth stronger than the first six months of this year," Uribe told a forum on the financial crisis.

Finance Minister Oscar Ivan Zuluaga estimated foreign direct investment could slide as much as 30 percent from last year's figure.

Colombia recently reported its gross domestic product shrank 0.7 percent in the last quarter of 2008 while the government lowered its growth outlook for this year to between 0.5 percent and 1.5 percent from a previous forecast of 3 percent.

Colombia last year registered a record $10.56 billion in foreign direct investment, thanks in part to improved security under President Alvaro Uribe, who has used billions in U.S. aid to crack down on leftist rebels and drug traffickers.

The central bank has slashed its benchmark interest rate to spur growth. But the world economic turmoil has hit consumption and commodity exports in the Andean country and industrial production and construction sectors have been hard hit.

(Reporting by Javier Mozzo, writing by Patrick Markey in Bogota)



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