May 19, 2017 / 4:54 PM / in a year

UPDATE 1-Colombia's GDP grew 1.1 pct in 1st qtr, below expectations

(Adds details, quarter versus quarter growth)

BOGOTA, May 19 (Reuters) - Colombia’s economy grew 1.1 percent in the first quarter compared with the same period a year ago, the government said on Friday, below the central bank’s estimate of 1.3 percent.

Latin America’s fourth-largest economy is working to recover from a slump in global oil prices and a rise in inflation. Growth reached 2 percent in 2016, more than what had been predicted by analysts.

The central bank’s technical team had predicted year-on-year expansion between 0.8 percent and 1.8 percent, with 1.3 percent as the most likely figure.

Analysts in a recent Reuters survey were even further off the mark. They estimated that growth would reach 1.5 percent between January and March compared to the same period last year.

Continued tough times for the oil and mining sector, which contracted 9.4 percent during the first quarter, contributed to the lower-than-expected figure, as did construction, which contracted 1.4 percent.

The agriculture and finance sectors grew by 7.7 percent and 4.4 percent respectively, statistics agency DANE said.

Gross domestic product contracted 0.2 percent in the first quarter of this year versus the fourth quarter of 2016, its lowest level since a 0.2 percent contraction in the third quarter of 2012.

The fall in crude prices has slowed production, as have persistent pipeline attacks by the left-wing National Liberation Army (ELN) rebels, who oppose the presence of multi-national oil companies in the Andean country.

The central bank board has been grappling with both high inflation figures and lower growth and in April cut the benchmark interest rate by 50 basis points in an effort to boost expansion.

But board chief Juan Jose Echavarria has hinted policymakers may not cut interest rates as sharply in May because there is reason to be “skeptical” that good news about inflation, which held steady at 0.47 percent in April, will continue.

The central bank predicts growth will reach 1.8 percent this year. (Reporting by Bogota newsroom; Editing by Chizu Nomiyama and Chris Reese)

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