UPDATE 3-Colombian economy surges in 1st quarter; rate hike seen likely
(Adds changing interest rate forecast)
By Nelson Bocanegra and Peter Murphy
BOGOTA, June 19 (Reuters) - Colombia's economy grew 6.4 percent in the first quarter compared with the same period last year, the government said on Thursday, the strongest first-quarter result since 2007 and well above analysts' predictions of a 5.1 percent expansion.
The surprising reading is likely to reinforce expectations the central bank will raise the benchmark interest rate on Friday a further 25 basis points to 4 percent, following two such increases at the bank board's last two meetings.
A Reuters survey earlier this week showed 20 of 23 analysts expected a 25-basis point increase, but four of those 20 said on Thursday they now expected a more aggressive 50-basis point hike. The majority still foresaw a 25-point rise but said further hikes were now more likely this year.
"Tomorrow's rise will still be 25 (basis) points, but this surprise could decide the path for the central bank and extend increases during the year, so projections will be revised," said Oscar Jaulin, an analyst at the Serfinco brokerage.
The government also revised the full-year 2013 growth figure upward to 4.7 percent from 4.3 percent previously.
The Andean economy has been accelerating fairly steadily over the past year due to an expansionist monetary policy which had held the benchmark interest rate at 3.25 percent for 13 months until the hikes began at the end of April.
Growth in the first quarter compared with the fourth quarter of 2013 was 2.3 percent, said the national statistics agency DANE. Continuación...