UPDATE 1-Ecuador central bank ups '07 GDP data and '08 view

 

(Recasts, adds quotes, details and background)

By Alonso Soto

QUITO, Sept 5 (Reuters) - Ecuador's central bank chief on Friday said his institution has revised upwards its economic growth data for 2007 and was raising its forecast for economic expansion this year to above 4 percent.

"During the first quarter of this year (the economy) grew 1.3 percent and if that growth rate is sustained we will have growth above 4 percent" this year, Carlos Vallejo told Reuters.

The bank in June had seen 3.1 percent GDP growth for this year.

Vallejo's data for first quarter 2008 economic growth were the first publicly released by a government official.

And he made another announcement for the first time on 2007 economic growth revisions. He said the bank revised upward the oil-producing country's growth rate to 2.49 percent from an earlier figure of 1.9 percent.

Vallejo made no specific forecast for 2009 growth but said the finance ministry's outlook was "conservative."

On Wednesday, Finance Minister Wilma Salgado told Reuters that the finance ministry had raised its for growth in 2008 to 4.5 percent and slow to to 3.5 percent next year, citing the government's budget proposal. For details see [ID:nN03523071].

Vallejo took up his post as head of the central bank's five-member board in July, the same month that Salgado assumed her ministerial position.

Vallejo said the bank is reviewing its GDP calculation methods, a move criticized by some economists who said the government is tampering with its figures to favor the image of the administration of President Rafael Correa, who took office in January 2007.

Correa, a former economy minister, has chided the central bank over what he said was under-reported economic growth for 2007, which was weaker than the 3.9 percent GDP growth in 2006.

He has charged some career bank officials of mishandling indicators to undermine his leftist government.

A weaker economy and soaring inflation are key to Correa's popularity as he faces what polls say a closely fought campaign over a Sept. 28 referendum to pass a new constitution that would bolster his powers over the country's finances and political institutions.

Vallejo, a close Correa ally, dismissed allegations of tampering and said the central bank has used outdated information to calculate its GDP figures. He added that experts from Argentina and the United Nations are helping the bank improve its methodology.

Argentina has faced a flurry of criticism from economists and analysts who say its under-reporting inflation figures.  Continued...