UPDATE 1-Ecuador's economy grew 3.5 pct in second quarter

Friday, 1 Nov 2013 | 7:24 PM ET

QUITO, Nov 1 (Reuters) - Ecuador's economy grew 3.5 percent in the seacond quarter that ended in June vs the same period a year earlier, driven by expansion of construction, communications and oil sectors, the central bank said on Friday.

Second quarter growth in 2013 was the same as first quarter growth of 3.5 percent, but marked a slowdown from the second quarter of 2012, when the Andean nation's GDP expanded 5.5 percent year-on-year.

The South American nation, which is OPEC's smallest member, saw its economy grow 5 percent in 2012.

However, growth is expected to slow this year due to slumping prices for commodities and the idling of its largest refinery for several months for an overhaul.

Decent economic growth and heavy state spending helped President Rafael Correa win a landslide re-election in February.

He is predicting growth of 3.7 to 4.0 percent this year, and an improved 4.5 to 5.1 percent growth in 2014.

The leftist government has said it plans to issue sovereign debt - perhaps this year or in the first quarter of 2014 - marking a return to international debt markets five years after defaulting on $3.2 billion of sovereign bonds.

The Finance Ministry said on Friday that the government's 2014 budget would be $34.3 billion - a 6 percent rise from the previous year's $32.4 billion. A deficit of $4.9 billion would be "adequately" financed, it added in a statement.

The budget forecasts 3.2 percent inflation and average crude sale prices of $86.40 per barrel for 2014, it added.