UPDATE 3-Ecuador sees economy growing 5.06 pct in 2011

* Average inflation seen at 3.69 percent

* Average oil price forecast at $73.30 per barrel

* Rivera says 2011 budget spending will be $23.95 billion

* External funding seen at just under $5 billion

* Next year’s fiscal deficit forecast at $3.73 billion
(Updates with finance minister quotes, details)

By Alexandra Valencia

QUITO, Oct 30 (BestGrowthStock) – Ecuador’s government expects
economic growth of 5.06 percent next year and for the South
American oil producer to see average inflation of 3.69 percent,
Finance Minister Patricio Rivera said on Saturday.

Rivera told reporters his 2011 budget forecast spending of
$23.95 billion — 12.4 percent higher than this year’s
estimated figure — and that the government expected an average
oil price of $73.30 per barrel next year.

“The program provides funding for absolutely everything.
Everything is funded,” Rivera said.

He said President Rafael Correa’s administration would
invest $3.5 billion in the oil sector during 2011. It forecasts
total crude production of 181 million barrels and plans to
export 126 million barrels, he said.

The National Assembly is expected to approve the budget
within 30 days.

Ecuador’s economy grew just 0.4 percent last year as the
global financial crisis cut demand for crude oil. The
government says it expects growth of 3.7 percent this year but
analysts have said it will probably be closer to 2 percent.

The Andean country’s economy grew 1.87 percent during the
second quarter of 2010 compared with the first quarter, the
central bank said earlier this month. [ID:nN01190758]

The finance minister said his 2011 budget would require
external funding of just under $5 billion and that it included
a plan to pay off public debt worth $1.57 billion. He forecast
next year’s fiscal deficit at $3.73 billion.

The government’s spending plan had a strong emphasis on
investing in “the strategic sectors, the social and productive
sectors,” Rivera told the news conference.

Non-oil public investment would amount to about $4.7
billion, he said. Some analysts have said the projections could
lead to the state taking on too much debt.

Ecuador defaulted on $3.2 billion of global bonds two years
ago and is still excluded from international debt markets.
Since then it has met its financing needs through bilateral
loans from China and development banks.

It was an unusual default in that the government had the
money to pay the debt at the time but chose not to, saying the
obligations were “illegitimate” for having been contracted by
corrupt government officials and greedy bankers.

OPEC’s smallest producer has used the dollar as its
official currency since 2000, meaning the government cannot
print money to cover its budget and other local payments.
(Writing by Daniel Wallis; Editing by John O’Callaghan)

UPDATE 3-Ecuador sees economy growing 5.06 pct in 2011