August 4, 2014 / 7:10 PM / 3 years ago

UPDATE 1-Colombia cenbank sees 2015 GDP growth at 3.5 to 6 pct

(Adds comment, detail on interest rate)

BOGOTA, Aug 4 (Reuters) - Colombia’s central bank sees healthy economic growth both this year and next with inflation under control, bank chief Jose Dario Uribe said during a quarterly economic presentation on Monday, citing consumer confidence and credit levels.

The economy will likely grow between 3.5 and 6 percent in 2015, while inflation will probably end that year around 3 percent, the same level as forecast for this year.

“We want to maintain an interest rate that keeps inflation around 3 percent and the economy growing around its potential,” Uribe said.

“All the information we have shows that consumption will maintain an important pace ... equal to and even maybe superior to the average of the last 10 or 12 years.”

The economy has accelerated this year to levels that surprised the market, expanding 6.4 percent in the first quarter and prompting Finance Minister Mauricio Cardenas to consider raising his growth estimate for 2014 from 4.7 percent.

The United Nations’ body for Latin America and the Caribbean (ECLAC) said on Monday it expected the region to grow 2.2 percent in 2014, below its previous forecast. Colombia was the only economy ECLAC revised upward among Latin American nations like Brazil, Chile, Peru, Brazil, Argentina and Mexico.

Colombia’s economy is producing close to its maximum capacity, Uribe said, narrowing a so-called negative output gap and allowing strong growth without spiking inflation.

The bank sees the economy accelerating at 4.3 percent in the second quarter, Uribe said.

The policymaking board lifted the benchmark lending rate by 25 basis points to 4.25 percent on Friday - the fourth straight increase - in a bid to withdraw monetary stimulus as growth picks up steam.

The board has indicated that a neutral rate in the current hiking cycle is lower than in previous cycles, prompting economists to expect the bank to halt rate increases sooner than they have in the past.

In monetary policy terms, a neutral interest rate is one that does not affect the economy as it occurs when growth is at potential and inflation is on target.

Policymakers have said recent rate hikes were aimed at reining in inflation pressures early to avoid having to make larger remedial adjustments later on.

June inflation data, the most recent available, showed price growth at 2.85 percent, still a little below the mid-point of the central bank’s 2 to 4 percent target range.

The government will reveal price data for July on Tuesday. (Reporting by Helen Murphy, Peter Murphy and Nelson Bocanegra; Editing by Nick Zieminski)

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