November 8, 2013 / 6:56 PM / in 4 years

UPDATE 1-Colombia central bank sees 2014 growth in 3 pct-5 pct range

BOGOTA, Nov 8 (Reuters) - Colombia’s economy will grow between 3 percent and 5 percent in 2014 while inflation is expected to remain below 3 percent, the Andean country’s central bank forecast on Friday.

In its quarterly economic report, the central bank said third-quarter growth is seen in a range between 3.8 percent and 5.4 percent. If achieved, that would help put full-year growth within reach of the 4 percent forecast by policymakers for 2013 despite a weak start to the year.

Central bank chief Jose Dario Uribe said the supply of credit was rising at a safe level and not too far above the rate of economic growth. The improved growth outlook for the global economy next year would also improve the international scenario.

Uribe said the benchmark interest rate which has been held at 3.25 percent for seven straight months was helping promote growth.

“We believe we have an interest rate that stimulates the economy and is expansive,” he said, reiterating inflation remained low nonetheless.

He said Colombia would be able to respond to a tightening of U.S. monetary policy when it eventually reduces monetary stimulus by slowing the purchase of its sovereign bonds, through counter-cyclical measures such as cutting interest rates.

Colombia’s economy has an important mining and crude oil sector which attracted $10.3 billion in foreign investment in the first three quarters, lured by improved security after a decade-long U.S.-backed offensive against Marxist guerrillas even though attacks continue.

The coffee sector in the world’s top grower of fine-grade arabica beans is also a huge employer. But manufacturing has been weakened in recent years by an overvalued peso currency that has made its goods less competitive in export markets.

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