Colombia's Q2 GDP at 6.87%

Sep 21, 2007 - Colombia's economy grew nearly 7 percent in the second quarter of this year, aided by strong foreign investment and the financial, communications and transport sectors, the government said on Friday.

The Andean country's gross domestic product expanded 6.87 percent with illicit crops during the three-month period and 6.97 percent not including those figures, the DANE government statistics agency said in a statement.

The economy grew 8.11 percent in the first quarter of this year and 5.79 percent in the second quarter of last year.

"Domestic demand, which was worrying the central bank, has moderated, and that gives more arguments for the bank not to raise its interest rates today. The investment side is very strong," Bank of Bogota analyst Lorena Lizarazo said.

The central bank is due to decide on key interest rate policy later on Friday. Analysts expect the bank to keep the rate steady at 9.25 percent, according to a Reuters poll earlier this week.

Colombia is the world's top producer of cocaine, most of which is shipped to the United States and Europe. The government receives millions of dollars each year to help fight armed groups and eradicate coca used to manufacture cocaine.

Foreign investment is flowing into the country drawn by the improved security situation under President Alvaro Uribe. Aided by U.S. funds, Uribe has cracked down on leftist rebels fighting Latin America's oldest guerrilla insurgency.